Main irritant: Saudi Arabia and China are friends against the US

Source: xinhuanet.com

Riyadh vs.

It so happened that oil-bearing Saudi Arabia is a long-standing and reliable partner of the United States. Since 1974, the kingdom has been trading oil exclusively for dollars and keeps a large part of its reserves in American currency. In exchange, the Saudis receive the patronage of Washington. The Yankees, for example, turn a blind eye to "human rights" violations that are unimaginable in the collective West.

More recently, Riyadh, with the tacit consent of Washington, defiantly executed 80 people, of which at least half were Shiite Muslims. Iran has already responded to the largest mass execution in stories and broke off dialogue with Saudi Arabia on normalizing relations. The Biden administration could not say anything intelligibly, but only asked to increase oil production rates in order to drop prices in spite of Russia. However, despite the non-intervention of the Americans, King Salman Al Saud has accumulated many complaints against the current administration of the White House. First of all, Joe Biden does not support the Saudis in the war against the Houthis in Yemen.

Sunni Saudi Arabia has assembled a coalition and has been diligently ironing out the Shiite state since 2015 - according to the most conservative estimates, about 400 thousand people have already died. Prior to Biden's arrival, the Americans diligently did not notice such behavior of Riyadh - there were no sanctions, no frozen accounts, no oil export ban. The Saudis beat and beat civilians, at funeral ceremonies, at weddings, since American weapons allow a lot. And only under Biden did signs of condemnation appear, which, however, did not lead to anything significant - the humanitarian crisis in Yemen acquired catastrophic proportions. But Washington's critical rhetoric still does not suit Riyadh. They are waiting for approval and support.

The second reason for the dissatisfaction of the Saudis was the soft position of the Americans towards the Iranian nuclear program. With the Ukrainian crisis, this issue has become especially acute - now the United States is ready to do a lot, just to drop prices from $100 per barrel. The deal with Shiite Iran and the release of new portions of oil on the market are completely unprofitable for the Saudi kingdom. Firstly, it will reduce incomes, and secondly, it will untie the hands of Tehran. The flow of petrodollars will make it possible to even more significantly support the Yemeni Houthis, who have been receiving money by sea and air for many years. weapon and equipment from Iran.

Saudi Arabia is counting on the support of the United States in the confrontation with the Houthis. While in vain. Apparently, the Americans intend to support Tehran's position in the conflict. Source: medium.com

The withdrawal of American troops from Afghanistan also came as a real shock to the royal court of Riyadh. A classic situation has developed - the new head of the White House has canceled the decisions of previous presidents. He ended the war, so to speak, and at the same time betrayed all the promises of peace and tranquility in the region. Who will guarantee that Saudi Arabia will not lose the support of the United States during the next change of power? The kingdom does not know the exact answer to this question. But they know exactly what will happen to multibillion-dollar savings in the event of an aggravation of relations with Washington. On the example of Russia, it is obvious that they will simply be stolen.

The coming "green future" of the United States is also important, which, together with the Europeans, sincerely believes in the rapid replacement of fossil fuels with windmills, solar panels and hydrogen. Understandably, this annoys the royal family quite a bit. In addition, Saudi Arabia has not exported the same amount of oil to the Americans for a long time - Washington is diligently diversifying hydrocarbon supplies. The Saudis only ship to the Americans a quarter of the oil that went to the US in the 90s. And this is where the generous buyer China comes in handy.

Axis Russia - Saudi Arabia - China

The crisis of 2014 and sanctions pressure on Russia led to a rapprochement between Moscow and Beijing. It turned out well: China is the largest buyer of oil, and Russia is one of the largest exporters. The trade turnover between the countries, as well as the exchange of technologies, was constantly growing. Xi Jinping consistently supports Vladimir Putin, assuring him of "boundless friendship." And indeed, China strictly maintains neutrality in the military special operation to liberate Donbass, which actually means support.

It comes to the point that Joe Biden is forced to personally talk with the Chinese leader and convince him to change his course of action. Nothing will come of it - China remembers very well the humiliating administrative boycott of the 2022 Winter Olympics by the United States and satellites, technological sanctions, the buildup of weapons in the Indo-Pacific region and support for Taiwan. The image of an unreliable ally is gradually being formed around the United States, which means that alternative alliances need to be created.

The first steps in this direction have already been taken - China is supporting Saudi Arabia. First of all, by buying the lion's share of oil and not flirting with alternative energy sources. At the moment, it is the giant Aramco that is the key supplier of "black gold" to China. Technological cooperation is also developing. According to The Wall Street Journal, Beijing has been sharing nuclear technology with the Saudis for several years. So far, they are only limited to peaceful atom, but defense projects are not far off. At least Saudi Arabia has already learned how to process raw uranium into fuel with the help of Chinese comrades. At the same time, Beijing is teaching the Saudis to build their own ballistic missiles. The Americans, although they are still the main sellers of weapons for Riyadh, do not supply everything that the kingdom asks for. China is much more accommodating in this regard.

In March, Saudi Crown Prince Mohammed bin Salman unveiled yet another leverage on the US in the form of investment cuts. According to the monarch, the kingdom may cut its $800 billion investment in the overseas economy. Funds are likely to be redirected to China.

We are witnessing the emergence of a new mutually beneficial and autonomous triangle: China - Saudi Arabia - Russia. They are united not by political motives, but by much stronger economic interests. All three countries are ready for a gradual move away from dollar settlements in favor of the yuan. Moscow is rapidly moving to the Chinese currency, and more than half of the transactions in the energy sector are in the yuan. But on a global scale, this is almost imperceptible.

But the negotiations between Beijing and Riyadh on settlements in yuan are already seriously troubling the Americans. If the deal works out, then about 2% of the global financial market will be de-dollarized overnight. This, of course, is not much and will not turn everything upside down. But the exit of a number of countries from the dollar zone did not begin yesterday - this is a long-term, albeit slow, process. According to SWIFT, in 2001, about 90% of all world settlements were made in dollars, but now - no more than 40%. Slowly but surely, the value of the dollar in world reserves is also declining. If in 2000 up to 70% of sovereign savings were denominated in dollars, then in 2022 - already 59%. Not much, but the trend is there. In this regard, the demarche of Saudi Arabia and China can become an example for other countries. Now India is considering an alternative option for buying Russian energy resources for yuan.

The emerging Russia-Saudi Arabia-China axis is capable of creating serious competition for US plans in the energy sector. According to American analysts, now Washington needs to destroy this alliance at any cost. However, Joe Biden does not take any steps in this direction. Swinging the baton of sanctions, the main irritant is gradually losing allies, acquiring more and more ill-wishers.

Comments

[Borik]

If the Arabs and the Chinese agree, and then other countries continue this initiative, then such a good blow will be dealt to the dollar. Is this green piece of paper will not lose in value?

[Machito]

The Arabs and the Chinese will agree, like the rest of the countries, if Russia gives the US a good kick. Everything goes towards this.

[NIKN]

I don't trust Arabs. in the sense I do not believe in their reliability, they take the first place in changing shoes without laces. Yes, and the states have leverage not frail to put pressure on them. The result really has a chance if only as you said.

Quote: Bearded

Russia will give a good kick to the US.

[Vladimir Vladimirovich Vorontsov]

***
Fly(Mohammed bin Salman Al Saud) handsome man
- Squinting out of political correctness...
***

[Far B]

Now the US is ready to do anything to bring prices down from $100 per barrel.

I don’t like something: is shale US oil already FSE? Or now about the fact that the more expensive the cost of a barrel, the better for shale, is it unpatriotic to remember?

[Doccor18]

Quote: Dalny V

and shale US oil is already FSE? Or...

It seems that the maximum has already been passed.

Thus, the US Department of Energy expects an increase in production on average in 2022 to 11,8 million b/d, and in the fourth quarter of the year, production can reach 12,1 million b/d, which is nevertheless lower than the maximum of 2019...
Since January 2020, the number of DUCs has almost halved, to 4,8 thousand units in November, follows from the data of the US Department of Energy. This is the lowest rate since January 2014. At the same time, the number of new wells drilled, although gradually increasing, is still 40% lower than at the beginning of 2020 (see chart). Clearly, US shale producers have largely exhausted their ability to ramp up production with minimal investment, and production growth will require significantly more drilling in the coming months.

[Far B]

Clearly, US shale producers have largely exhausted their ability to ramp up production with minimal investment.

And here the passage about the minimum investments. As I said above, the more expensive the barrel, the, ahem, the fatter the investment - the shale benefits. Takshta and the rise in oil prices are beneficial for shale players, which for some reason is not customary to recall now.

[hagen]

Quote: Dalny V

Takshta and the rise in oil prices are beneficial for shale players, which for some reason is not customary to recall now.

I think that the whole point is that the cost of oil shale production is also growing. If earlier, for the most part, drilling consisted of sidetracking in the existing well stock and going horizontal along the shale reservoir, but today there is already a need to drill the entire well from "0" and to a greater depth. Unlike traditional oil reservoirs, shale reservoirs contain much less fluid and therefore, even if they give a large flow rate at the beginning, they are very quickly depleted, literally in a matter of years. Yes, and investors, deceived at first by shale players, today, based on the real experience of shale deposits, they already understand that not everything there is so radiant and profitable.

[NKT]

The prime cost grew as the companies did not complete the well: they did not carry out hydraulic fracturing, did not run KPO, etc., and the rig moved to another point. Now, accordingly, it is necessary to complete "old wells" and drill new ones with completion.
As for their "depletion", they are quickly flooded - a year or two, since shale contains a lot of bound and mobile water, respectively, and the gas flow rate decreases with time.

[hagen]

Quote: NKT

The prime cost grew as the companies did not complete the well: they did not carry out hydraulic fracturing, did not run KPO, etc., and the rig moved to another point.

I'm curious, where did you come up with that? U.S. oil and gas operations may differ from our companies. Each stage of the design, construction, completion and commissioning of a well can be handled by different companies, but in the interests of one customer, who will receive investments and in the future be responsible to investors for their efficient work and final income according to the business plan. I will not talk about the methods of intensifying production at a separate well, but there is not always only one injection of water into the injection well, there is still everything. But it doesn't change the essence. Sawing a new well is much more expensive than using an old one. Their number per unit area of ​​the deposit is also not dimensionless. Even if the MP is hit like a colander, more production may not follow due to the mutual influence of the wells. Obviously, over the past 18 years of the shale revolution, the main “foam” has been removed. And now it will all be a little more expensive.

[NKT]

I'm curious, where did you come up with that? The organization of oil and gas production in the United States may differ from our companies

The article came across a few months ago. I'll try to find it and post it.

I will not talk about the methods of intensifying production at a separate well, but there is not always only one pumping of water into the injection well, there is still everything

Speaking about water, I meant that the skazhina is flooded not because of water injection for RPM, but because of the type of the rock itself - shale, which a priori contains both free and bound water. You can initially produce with a small amount of water, then the reservoir pressure drops, you increase the drawdown and thus begin to produce even more water.

Sawing a new well is much more expensive than using an old one.

Not always. Depends on the depth of the beginning of the kickoff of the BS, including. Since you need to have time to gain an angle to enter the reservoir, and the stock may not be enough. It's easier to drill the Bis-well - move the machine 10m away and re-drill.

Even if the MP is hit like a colander, more production may not follow due to the mutual influence of the wells.

So the grid of wells is preliminarily run on dynamic models in order to understand the zones of drainage of reserves. And if the well has already drained reserves in its area, then it is easier to move away from it by 100m and drill again than to do sidetracking. Since the cost of KPO for two or three-bottomhole wells is completely different.

[Doccor18]

Quote: Dalny V

the more expensive the barrel, the, ahem, fatter the investment - the slate benefits.

So it is, but its cost was already high, and production made sense only with a very expensive barrel. And now, when investments in production also need to be increased significantly, the cost of a barrel should beat all sorts of records and, most importantly, not to become cheaper for a long time, otherwise investments will not be recouped. But just hopes that its value will only tend upwards, no one has. Too volatile product...

[rotmistr60]

Saudi Arabia and China are friends against the US

And it's nice to hear and watch.

According to SWIFT, in 2001, about 90% of all world settlements took place in dollars, but now - no more than 40%

And after the United States robbed the Russian gold reserves stored in their banks and are trying to block the flow of foreign currency to Russia, many will think about whether it is worth making settlements in dollars and keeping their reserves in the United States.

[tralflot1832]

What surprises me the most is the impudence of the Americans. To give a shit at the neighbor’s door, and then come to him and ask for salt. That they can’t calculate the options for the neighbor’s answer, there are only two of them: They will give in the face or give salt, but very expensive, but the option to get everything still not cancelled.

[rocket757]

Main irritant: Saudi Arabia and China are friends against the US

If someone loses something, it’s not a sin to pick it up and adapt it FOR THE BUSINESS!

[riwas]

Main irritant: Saudi Arabia and China are friends against the US

"The ice has broken, gentlemen of the jury..."

[mojohed2012]

Biden signaled to China that he would soon pay the price for supporting Russia.
But why then does Saudi Arabia (a longtime US ally) not support Washington so much?
Don't you think that changing the monetary system of a macroeconomic nature is some kind of long-standing and clear agreement between Putin-Xi and Ben-Salman?
Yes. And yet, soon Maduro will fly to us from Venezuela. Ours sent him an invitation, and Venezuela, for a moment, is not such a small supplier of oil and gas in the world.
And recently, Iran also refused the US oil in exchange for promises to promise to lift some of the previously imposed sanctions.
So you have a circle of people formed by prior agreement.
And where is the dollar? Ay? And where is the Euro?
Meanwhile, the dollar, after Putin announced on March 23.03.2022, 100. the transition of payments for gas supplies to the EU to rubles and with Japan is also evident - the dollar exchange rate fell below XNUMX rubles.
Well, then who are the US and the EU imposing sanctions on? Yourself?
And how their citizens, exhausted by the pandemic and the crisis, will remember them when they find out that the dollar is rapidly diving, and the ruble is growing, however, like the yuan!

[Charik]

And over there, the Chukhons go to Belarus, for food-gasoline, they finally swelled up, they need to close the shop, let them eat their own.

[nikvic46]

There are several questions. How much oil will be supplied to China? How long is this agreement signed for? And it’s not at all a question, Saudi Arabia will continue to supply the United States under previously concluded agreements. And then she will think that it is more profitable for her.

[The popuas]

It seems that the sale of India's oil for yuan and not for rubles is Russia's payment for China's neutral attitude towards the operation in Ukraine! India would never agree to this ... because they have graters with China wow ...

[TermNachTer]

I don't remember which one, the British Prime Minister said that Britain has no permanent allies, but only permanent interests. Why should others be different? We were friends for 40 years, and now we decided to "change shoes"))))

[Dkuznecov]

The Husit in the photo is fake.
There is no cat behind the cheek.