Arab Gulf states reduce focus on politics to concentrate on oil, economy
Gulf states have been attempting to expand oil agreements with major consuming countries, observers say.
Tuesday 11/01/2022
Chinese Foreign Minister Wang Yi (R) bumps elbows with Saudi Foreign Minister Faisal bin Farhan Al Saud in Wuxi, east China’s Jiangsu Province, January 10, 2022. (Xinhua News Agency)
RIYADH –
Arab Gulf countries have begun to completely shift their strategy on foreign policy, with a declining focus on political issues and the centre of attention turning to their economic interests.
To this end, Gulf states have been attempting to expand oil agreements with major consuming countries, observers say. This was apparent following news of the visit of foreign ministers from Saudi Arabia and other Middle Eastern states to China this week for meetings with officials from the world’s second largest economy, a leading consumer of oil and source of foreign investment.
The visit of the foreign ministers, observers noted, coincides with a significant rise in oil prices, on which the Asian giant greatly depends for its economy.
The focus on political issues and differences has in recent years triggered rows and disputes that affected the interests of all Arab Gulf states. Since early 2021, the United Arab Emirates has taken many steps towards putting into practice a “zero problems” policy towards countries of the region, particularly Turkey and Iran, analysts noted.
Saudi Arabia too has been pushing for a dialogue with Iran aiming to reduce security tensions and create a window for carrying through a major economic strategy based on investing in advanced technology, clean energy, tourism and entertainment.
The Chinese foreign ministry on Monday gave no details of the agendas for the visits, but said they were expected to “deepen relations between the two sides.”
Foreign ministers from oil-rich Gulf states arrived in Beijing on Monday for a five-day visit as turmoil in neighbouring Kazakhstan has raised concerns about China’s energy security.
The officials from Saudi Arabia, Kuwait, Oman and Bahrain, as well as the secretary general of the Gulf Cooperation Council (GCC) Nayef bin Falah al-Hajrah, are to stay in China until Friday.
China imports 40 percent of its oil needs from the Gulf region, while the International Energy Agency expects that about a quarter of the GCC exports will be going to China in 2040.
Saudi Arabia is the largest exporter of crude oil to China and Beijing relies on Qatar to secure its liquefied gas needs.
China and the UAE have close relations, as China ranks as the Gulf state’s premier trading partner with about $53.3 billion in non-oil trade annually. China is also the main trading partner of Kuwait.
Beijing has sought in recent years to bolster its ties with the Gulf states, with President Xi Jinping in 2014 aiming to more than double trade with the region by 2023.
UAE state-owned newspaper the Global Times said the visit may also “make breakthroughs” in talks over a China-GCC free-trade agreement.
The potential agreement was first tabled in 2004, with the two sides discussing in March last year the possibility of resuming negotiations.
Gulf states are taking advantage of the US-Chinese competition to expand and strengthen their alliances with various major international powers. The Gulf states are also seeking to be at the heart of the giant Chinese Belt and Road plan.
When it comes to oil, the Gulf countries are looking to coordinate positions within OPEC+ to secure a greater Gulf influence in the organisation, in a way that would allow Gulf states to determine the ceiling of production and control prices. Inter-energy projects are also of great importance to them.
Saudi Minister of Energy Prince Abdulaziz bin Salman discussed on Monday with his Omani counterpart Mohammed al-Rumhi coordination within OPEC + and their vision on oil market developments.
While oil prices are witnessing fluctuations as a result of the uncertainty in the global economy, Saudi Arabia is seeking to have global supplies match the volume of global demand, leading to the stability of oil markets.
The ministers discussed means of boosting cooperation in various energy fields, including renewable energy, the circular carbon economy and sustainability, the Saudi energy ministry tweeted.
Economists point out that Gulf states have begun to shift their strategy towards benefiting from oil revenues as much as possible and using them to invest in major projects, which would allow for building new economies with less dependence on oil in the coming years.
For this reason, the Gulf countries are keen on increasing their oil production capabilities while maintaining the upward price streak.
The UAE had previously set out an investment plan to spend $127 billion during the period 2022-2026 and also announced an increase in the UAE's national reserves of oil and gas, which would make the country a decisive regional hydrocarbon power. The UAE has also succeeded in raising its production share in the OPEC + alliance to 3.5 million barrels per day, starting May 2022, after a controversy with its partners.
Also in this direction, Iraq has announced plans to complete giant projects in the oil and gas sectors in Nasiriyah, Dhi Qar Governorate, in cooperation with the American company Chevron and other promising projects in the field of clean energy and gas investment in cooperation with the French company Total.
The visit of Gulf foreign ministers coincides with a significant rise in oil prices, on which China, the Asian giant, greatly depends for its economy.
thearabweekly.com
