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How likely are we to see a Saudi Arabian shift away from the US towards China?

By : Ziad K. Abdelnour| 3 November 2013
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Saudi Arabia has recently reacted with unusual bluntness to US moves at rapprochement with the kingdom’s enemies in Tehran and Damascus, forcing President Barack Obama to either alter his stance or risk a breakdown in relations.

The Saudis are clearly testing its 70 year US dependence….And quietly, America’s traditional allies in the region – such as Egypt, Israel, Jordan and the Gulf states – are rooting for the Saudis.

The Saudis basically observed how Obama was willing to compromise and settle for a deal with Syria after he had called for President Bashar Assad’s removal from power two years ago; they don’t like it and are hence starting to push back hard.

Now how real is that shift and what are we to make out of it?

I believe it is first and foremost all about Economics.

Saudi Arabia produces and sells oil. China needs more and more oil to meet its expanding economy. The US needs more oil, but is becoming capable of producing most of what it needs. The US is a shrinking market for Saudi oil; China is a growing market.

It’s as simple as that.

What is complicated is what other things flow from that simple fact… political relations; efforts to offset purchases of oil by sales of consumer goods; potential military alliances; etc.

Obviously, the failure to support the Syrian rebels and Obama’s unwillingness to take a stronger stance against the Iranian-Syrian alliance are big parts of the story too… but at the end of the day, there is no real alternative to American involvement and the Saudis as well as others have no real other choice but to wait until Obama is gone.

I won’t go into the full geopolitical and economics ongoing: Yes…. China is a huge market for the Saudis to tap. And despite the US having a ton more domestic reserves than anyone truly thought, we still love Saudi Oil. We have untold billions in refinery infrastructure already in place for their crude…. And their crude comes out of the wells as a much lighter or more refined product as it is compared to our hydro fractured product. We still have money to invest in refineries that are made for a lot of what we are bringing up. So Saudi oil is still cheaper right now.

I can go on and on but let’s be very clear why the US for sometime into the future will be the straw that stirs the drink in the Persian Gulf – It is basically about the “Projection of Military Power”. We keep Iran in check, we keep the region stable. Our Fifth Fleet is based in Bahrain, a very close ally of Saudi Arabia (they are actually connected together by the world’s largest causeway). Bahrain gave us American soil there, and so we always have one Carrier Battle Group Fleet permanently stationed in the Persian Gulf (typically we have TWO Carrier Groups in the region). One US Carrier Group represents the most powerful projection of power in recorded history (we have ten in total, with the USS Ford coming soon to make it 11).

This projection of power ensures stability in so many ways for the Saudi Royal Family that there is absolutely ZERO chance they will suddenly cut the US out and become locked-up allies with the Chinese.

It is a fact that the Chinese do not have a single aircraft carrier out there and there is no Chinese Navy to speak of. It’s a strong coast guard but not exactly well-trained or equipped. The United States on the other hand is very well entrenched there.

I believe Saudi Arabia to be an American ally for years to come. China isn’t close to being ready to play in this league yet. There are also national stability and strong cultural reasons behind it as well which I won’t even get there – I’ve already spoken the politically incorrect truth as it is!!

Share your thoughts…


By :� Ziad K Abdelnour

Ziad is also the author of the best selling book� Economic Warfare: Secrets of Wealth Creation in the Age of Welfare Politics (Wiley, 2011),

Mr. Ziad Abdelnour continues to be featured in hundreds of media channels and publications every year and is widely seen as one of the top business leaders by millions around the world.

He was also featured as one of the� 500 Most Influential CEOs in the World.