Saudi Arabia is known as one of the United States’ closest allies in the Middle East. But data from 2019 shows that while oil exports to the US have decreased, exports to China have skyrocketed.
Tensions have continued between the United States and China in recent months, and they could soon include complaints over ties with Saudi Arabia.
According to records tracking oil tankers and shipments, Saudi Arabia’s oil exports to China have doubled in the last year, from around 920,000 barrels per day in August 2018 to 1.8 million barrels per day in July 2019.
But oil exports from Saudi Arabia to the US have decreased by nearly 62 percent, dropping from around 688,000 barrels per day in August 2018 to 262,000 barrels per day in July 2019.
This comes as crude oil exports from the US hit an all-time high this year. And with Washington increasing sanctions on Iran, Saudi Arabia appears to be stepping in to fill the void by providing oil to China. But that is not the only tie between the two countries. Earlier this year, reports revealed that Saudi Arabia signed $28 billion dollars’ worth of economic cooperation agreements with China.
This includes a deal between Saudi Arabia’s state oil company and Chinese defense contractors to build a $10 billion dollar refining and petrochemical complex in northeast China.
Meanwhile, the US is still locked into an ongoing trade war with China, and promises of tit-for-tat tariffs between the countries contributed to oil prices falling more than one percent on Thursday.
Last month, the Organization of Petroleum Exporting Countries and its allies agreed to extend oil output cuts until March 2020 to prop up prices. Then this month, a Saudi official indicated more steps may be coming, saying “Saudi Arabia is committed to do whatever it takes to keep the market balanced next year.”
So, now it remains to be seen how the US will respond to increasing ties between China and Saudi Arabia, and if Saudi oil exports will become yet another bargaining chip in a possible peace deal, as the trade war between the world’s two largest economies continues.