Thursday, December 08, 2022

Analysis: Higher oil prices, Ukraine war on Saudi pivot point

DUBAI, United Arab Emirates ( Associated Press) – Rising global energy prices benefits Saudi Arabia as the world’s top oil exporter, but problems remain for the kingdom’s impulsive prince.

Whether trying to find jobs for a growing number of unemployed youth or looking for a way to end the protracted war started in Yemen, Crown Prince Mohammed bin Salman and his father King Salman are now in the midst of Russia’s war on Ukraine. A potential pivot point for the state is facing up. ,

Can the ruling Al Saud family reset a now-troubled relationship with the United States, the longtime security guarantor for the wider Persian Gulf, as tensions with Iran and high fuel prices squeeze Washington? Or does the state move on to China, now the biggest buyer of crude, or Moscow?

An American rapprochement is unlikely. Asked in a recent interview what he wants to know about President Joe Biden, Prince Mohammed frankly said: “I don’t care.”

“It is up to him to think about America’s interests,” the prince said.

For Saudi interests, however, perhaps no other country in the world stands as the kingdom to profit rapidly from the war economically.

Its vast oil resources, located close to the surface of its desert expanse, make it one of the cheapest places in the world to produce crude. According to the Institute of International Finance, for every $10 increase in the price of a barrel of oil, Saudi Arabia stands to make an additional $40 billion a year.

This is a wild turn of events considering oil prices turned negative in April 2020 At the peak of the lockdown in the coronavirus pandemic. Now, benchmark Brent crude is at $105 a barrel — an unseen high since 2014.

The extra cash comes in handy for Prince Mohammed, 36, whose vision for Saudi Arabia includes developing a futuristic city called Neom in the desert along the Red Sea. Its latest iteration includes a ski slope project called Trogena, which is advertised in a computer-generated commercial. Now in heavy rotation in the Middle East satellite channels.

But while the giant palaces now exist, satellite photos from Planet Labs PBC show that the wider NEOM project is still in its early stages. It will likely be years before they are counted on by the prince to produce jobs for the kingdom’s economy to shift away from oil.

Meanwhile, according to the Saudi General Authority for Statistics, unemployment among youth – a carefully watched barometer since the 2011 Arab Spring uprisings – stood at 32.7% for men and 25.2% for women. The reopening of theaters and allowing concerts in a state where ultraconservatives see music as a sin comes as a part of that push for Jobs.

“If I’m going to reduce the employment rate, and tourism can create a million jobs in Saudi Arabia, that means I have to do it,” Prince told The Atlantic magazine in a recent interview., “Choose the lesser sin than the great sin.”

However, the glow has come for human rights activists and some Westerners.

Saudi Arabia executed 81 prisoners in a single day, the largest known mass execution in the state’s history, after the lull of a pandemic. The Saudi-led war against Houthi rebels in Yemen continues years after a unilateral Ramadan ceasefire, when the prince promised a quick victory, destroying the Arab world’s poorest country.

Internationally, perhaps it didn’t get more attention than the murder and dismemberment of Washington Post columnist Jamal Khashoggi at the Saudi consulate in Istanbul in 2018. Khashoggi falsely insisted for several days before admitting to his murder.

Turkey moves on Thursday to end court case over Khashoggi’s death As its president seeks to repair relations with Saudi Arabia and the United Arab Emirates over economic concerns. To the United States, whose intelligence services believe Prince Mohammed sanctioned the operation that killed KhashoggiFinding a solution to the murder of a US permanent resident is far more difficult.

Biden, who called the crown prince “a pariah” during the campaigning, has only spoken to King Salman since entering the White House. Biden’s first overseas trip was for the G-7 summit in England – instead of the sword-dancing embrace then-President Donald Trump had given Saudi Arabia.

But now, with petrol prices at the pump at a record high in March, Biden has to face Saudi Arabia which repeatedly says it cannot be held responsible for high energy prices as it is the cause of Houthis attacks. encounters. It puts increasing pressure on Biden, whose administration withdrew US air defenses from Saudi Arabia last year,

Saudi Arabia, as well as the United Arab Emirates, are taking advantage of the situation to seek US concessions on Yemen while maintaining their ties with Russia. The state is also reportedly looking to sell some crude oil to Beijing in Chinese yuan.instead of the US dollar.

Even Ukraine’s President Volodymyr Zelensky has weighed in on the situation dramatically in recent days.Telling regional energy powers “Europe’s future depends on your efforts.”

“The state cannot – and should not – be left alone to protect the global energy supply at a time when the whole world is unanimously hurt by price hikes,” wrote Faisal J. AbbasEditor-in-chief of Saudi Arabia’s English language daily Arab News.

“This is an international issue that affects almost every household across the world. Therefore, Saudi Arabia deserves all the support it can get.”

Where future support comes from remains the question.


Editor’s Note – John Gambrel, Gulf and Iran news director for the Associated Press, has reported from every Gulf Cooperation Council country, Iran and other places around the world since joining the Associated Press in 2006. Follow him on Twitter www.

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