STRUGGLE FOR THE MIDDLE EAST

As tensions in the Middle East rise, the region is becoming a focal point for the growing rivalry between the US and China. A notable indicator of this competition was Washington's recent decision to lift the ban on arms transfers to Saudi Arabia. Previously, the Biden administration had halted the transfer of offensive weapons to the kingdom due to human rights concerns. However, the strengthening ties between Riyadh and Beijing, especially in the military sector, may have influenced this change. The US is clearly concerned that its influence in the region could wane, allowing China to step in, a process that has been underway for several years.

Saudis Shift Towards the East

Just a few years ago, it seemed almost unthinkable that Saudi Arabia, a long-time strategic partner of the US, would join the Shanghai Cooperation Organisation (SCO), a significant regional group led by China and Russia. Yet, in July, Saudi Arabia signed a memorandum of understanding to become a 'dialogue partner,' a step towards full membership. While the SCO is not a military alliance like NATO, it is more than just an economic group; its charter emphasizes security cooperation as a key aspect of its multilateral interactions.

On March 27, Saudi Aramco, the state-owned oil giant, announced it had acquired a 10% stake in China's Rongsheng Petrochemical Co., Ltd. for $3.6 billion. Saudi Aramco, which exports four times more crude oil to China than to the US, has agreed to supply Chinese refineries with 690,000 barrels of oil per day. Saudi Arabia chooses its key partners based on mutual benefits and alignment with its Vision 2030 program, which aims to make the kingdom self-sufficient and secure. Additionally, Saudi Arabia has officially applied to join BRICS, another China-led group that includes Brazil, Russia, India, South Africa, and new members like Iran.

With China making up 72% of BRICS' total GDP, the bloc might decide to settle trade payments in renminbi. Even if this doesn't happen immediately, China could start paying for its hydrocarbon imports from Saudi Arabia in renminbi. Given that China accounts for 15% of global oil demand and 10% of oil trade, neighboring oil-producing countries might also adopt this payment method.

Testing the US-Saudi Strategic Partnership

China is unlikely to replace the US as the dominant power in the Middle East anytime soon. Washington remains the primary security partner for most Gulf states. Saudi Arabia continues to host US military bases, and in July, the two countries conducted their first joint drone exercises at a new military test center in Riyadh. Additionally, two Saudi airlines have announced plans to order 78 aircraft from US manufacturer Boeing, with an option to purchase another 43.

However, China's growing presence in the Middle East is causing concern in Washington. US officials downplay the significance of Saudi Arabia joining the SCO, stating that it is long overdue and does not threaten US interests. Nonetheless, they are uneasy about Middle Eastern countries adopting Huawei's 5G technology. They have cautioned that collaborating with China could jeopardize their relationships. To counter Saudi Arabia's integration into the emerging pan-Asian security system, the United States has decided to resume sales of offensive weapons to Saudi Arabia.

"Saudi Arabia remains a close strategic partner of the United States, and we look forward to strengthening that partnership," State Department spokesman Vedant Patel told reporters. He explained that restrictions had been imposed after "thousands of civilians, including children, were killed in Saudi airstrikes against Iranian-backed Houthi rebels who have taken control of much of Yemen." However, since then, the geopolitical landscape in the region has changed significantly. In early 2022, supported by the United States, the United Nations brokered a truce in Yemen that has largely been upheld.

Since the truce began, "there have been no Saudi airstrikes on Yemen, and cross-border fire from Yemen into Saudi Arabia has largely ceased," Patel noted. "Since then, the Saudis have upheld their end of the agreement, and we are prepared to uphold ours," he concluded.

Deal with Israel as a Marker of Influence

Remarkably, both the US and UK, along with Israel, are striking Houthi targets in Yemen while Saudi Arabia observes from the sidelines. The Houthis have launched rockets at merchant vessels in the critical Red Sea shipping lanes in solidarity with Palestinians who have been targeted by Israel since the Hamas attack on October 7.

In a bid to find a long-term resolution to this issue, US Secretary of State Antony Blinken has traveled repeatedly to Saudi Arabia to discuss a potential US stimulus package contingent on the kingdom recognizing Israel. For its part, Saudi Arabia is seeking security guarantees, increased arms supplies, and an agreement to develop a civilian nuclear program using US technology—all in exchange for normalizing relations with Tel Aviv.

Israeli Prime Minister Benjamin Netanyahu has made normalization with Arab states a primary goal. Securing an agreement with Saudi Arabia—the custodian of two significant Islamic holy sites—is viewed as Tel Aviv's principal "prize." However, Riyadh ties its normalization process with Israel to Tel Aviv's recognition of a Palestinian state. This concept is also championed by the Biden administration as a diplomatic pathway out of the conflict in Gaza. Meanwhile, Netanyahu's government and its far-right allies outright reject this notion.

As is known, Saudi Arabia collaborated with the United States, Jordan, and the UAE to repel an Iranian air attack on Israel following its strike on an Iranian diplomatic mission in Syria. Today, once again, the United States is counting on support from Arab partners as Iran threatens further airstrikes against Israel over the assassination of Hamas leader Ismail Haniyeh in Tehran.

China's Strategic Patience

China is closely monitoring all ongoing developments, seemingly waiting for an opportune moment to establish itself as an influential political player that has already gained substantial authority and intends to remain engaged in the Middle East. The US also has no intention of withdrawing from the region; it is bolstering its military presence while attempting to implement large-scale economic projects. One such initiative involves a route from India to Europe, in which the current US administration planned to invest $500 billion; part of this route was expected to pass through Saudi Arabia.

However, the war in the Middle East has significantly altered these plans. Now this route is rarely mentioned as Washington contemplates new attractive proposals that could entice regional players like Saudi Arabia. Military contracts are just the beginning; they are likely to be followed by investment projects not only in peaceful nuclear development but also across various sectors. However, China offers numerous attractive initiatives for Saudi Arabia. For example, a massive oil platform was launched in Qingdao, China. Its construction took nearly three years, and it weighs 17,000 tonnes, exceeding the height of a 24-story building. This giant structure is expected to enable an annual production of over 24 million tonnes of oil and 7.5 billion cubic meters of gas.

This project is just one example of the ongoing Saudi-Chinese investment cooperation, which continues to generate new ideas each year.

It is clear that both Beijing and Washington will offer increasingly favorable deals in their quest for influence over Riyadh—benefiting Saudi Arabia in this competition. Riyadh can be likened to a bride being courted by two desirable suitors, neither of whom she intends to marry; after all, it is far more advantageous to be an object of desire than to be bound by marital obligations. Moreover, as is commonly understood, debts must eventually be paid.