China sees ‘enormous potential’ in Saudi economy as crown prince visits

Chinese Foreign Minister Wang Yi says he sees “enormous potential” in Saudi Arabia’s economy and wants more high-tech cooperation. (AFP)
Updated 22 February 2019
0

China sees ‘enormous potential’ in Saudi economy as crown prince visits

  • China supports Saudi Arabia’s efforts to diversify its economy and is willing to strengthen high-tech cooperation, State Councillor Wang Yi said
  • Saudi Aramco is set to sign a pact to build a refinery and petrochemical project in Liaoning province in a joint venture with China’s Norinco

BEIJING: China sees “enormous potential” in Saudi Arabia’s economy and wants more high-tech cooperation, the Chinese government’s top diplomat said, as Saudi Crown Prince Mohammed bin Salman began a two-day trip to Beijing.
The Saudi delegation, including top executives from Saudi Aramco, arrived on Thursday on an Asia tour that has already seen the kingdom pledge investment of $20 billion in Pakistan and seek additional investment in India’s refining industry.
The crown prince will meet President Xi Jinping, who has made stepping up China’s presence in the Middle East a key foreign policy objective, despite its traditional low-key role there.
Meeting Saudi Foreign Minister Adel Al-Jubeir, State Councillor Wang Yi said the main features of their ties were respect, understanding and support for each other, China’s Foreign Ministry said in a statement late on Thursday.
“All countries in the world have the right to develop, and Saudi Arabia is an emerging market country with enormous potential,” the ministry paraphrased Wang as saying.
China supports Saudi Arabia’s efforts to diversify its economy and is willing to strengthen high-tech cooperation, Wang added.
Saudi Aramco, the world’s top oil exporter, will sign a pact to build a refinery and petrochemical project in northeastern Liaoning province in a joint venture with China’s defense conglomerate Norinco, three sources with knowledge of the matter said.
The investments could help Saudi Arabia regain its place as the top oil exporter to China, a position Russia has held for the last three years. Saudi Aramco is set to boost market share by signing supply deals with non-state Chinese refiners.
China has had to step carefully in relations with Riyadh, since Beijing also has close ties with Iran.
On Wednesday, Xi told the speaker of Iran’s parliament that China’s desire to develop close ties with Iran would stay unaltered, regardless of the global situation.
China is also wary of criticism from Muslim countries about its camps in the heavily Muslim far western region of Xinjiang, which the government says are for de-radicalization purposes and rights groups call internment camps.
Wang said both countries face the threats of terrorism and extremism, and should strengthen cooperation to safeguard security and stability.
China was not seeking to play politics in the Middle East, the widely-read state-run tabloid, the Global Times, said in an editorial on Friday.
“China won’t be a geopolitical player in the Middle East. It has no enemies and can cooperate with all countries in the region,” said the paper, published by the ruling Communist Party’s official People’s Daily.
“China’s increasing influence in the Middle East comes from pure friendly cooperation. Such a partnership will be welcomed by more countries in the Middle East.”

 

 


Saudi energy minister recommends driving down oil inventories, says supply plentiful

Updated 19 May 2019
0

Saudi energy minister recommends driving down oil inventories, says supply plentiful

  • Oil supplies were sufficient and stockpiles were still rising despite massive output drops from Iran and Venezuela
  • Producer nations discussed how to stabilise a volatile oil market amid rising US-Iran tensions in the Gulf, which threaten to disrupt global supply

JEDDAH: Saudi Arabia’s Energy Minister Khalid Al-Falih said on Sunday he recommended “gently” driving oil inventories down at a time of plentiful global supplies and that OPEC would not make hasty decisions about output ahead of a June meeting.
“Overall, the market is in a delicate situation,” Falih told reporters before a ministerial panel meeting of top OPEC and non-OPEC oil producers, including Saudi Arabia and Russia.
While there is concern about supply disruptions, inventories are rising and the market should see a “comfortable supply situation in the weeks and months to come,” he said.
The Organization of the Petroleum Exporting Countries, of which Saudi Arabia is de facto leader, would have more data at its next meeting in late June to help it reach the best decision on output, Falih said.
“It is critical that we don’t make hasty decisions – given the conflicting data, the complexity involved, and the evolving situation,” he said, describing the outlook as “quite foggy” due in part to a trade dispute between the United States and China.
“But I want to assure you that our group has always done the right thing in the interests of both consumers and producers; and we will continue to do so,” he added.
OPEC, Russia and other non-OPEC producers, an alliance known as OPEC+, agreed to reduce output by 1.2 million barrels per day (bpd) from Jan. 1 for six months, a deal designed to stop inventories building up and weakening prices.
Russian Energy Minister Alexander Novak told reporters that different options were available for the output deal, including a rise in production in the second half of the year.
The energy minister of the United Arab Emirates, Suhail Al-Mazrouei, said oil producers were capable of filling any gap in the oil market and that relaxing supply cuts was not “the right decision.”
Mazrouei said the UAE did not want to see a rise in inventories that could lead to a price collapse and that OPEC would act wisely to maintain sustainable market balance.
“As UAE we see that the job is not done yet, there is still a period of time to look at the supply and demand and we don’t see any need to alter the agreement in the meantime,” he said.
US crude inventories rose unexpectedly last week to their highest since September 2017, while gasoline stockpiles decreased more than forecast, data from the government’s Energy Information Administration showed on Wednesday.
DELICATE BALANCE
Saudi Arabia sees no need to boost production quickly now, with oil at around $70 a barrel, as it fears a price crash and a build-up in inventories, OPEC sources said, adding that Russia wants to increase supply after June.
The United States, not a member of OPEC+ but a close ally of Riyadh, wants the group to boost output to bring oil prices down.
Falih has to find a delicate balance between keeping the oil market well supplied and prices high enough for Riyadh’s budget needs, while pleasing Moscow to ensure Russia remains in the OPEC+ pact, and being responsive to the concerns of the United States and the rest of OPEC+, the sources said earlier.
Sunday’s meeting of the ministerial panel, known as the JMMC, comes amid concerns of a tight market. Iran’s oil exports are likely to drop further in May and shipments from Venezuela could fall again in coming weeks due to US sanctions.
Oil contamination also forced Russia to halt flows along the Druzhba pipeline — a key conduit for crude into Eastern Europe and Germany — in April. The suspension, as yet of unclear duration, left refiners scrambling to find supplies.
Russia’s Novak told reporters that oil supplies to Poland via the pipeline would start on Monday.
OPEC’s agreed share of the cuts is 800,000 bpd, but its actual reduction is far larger due to the production losses in Iran and Venezuela. Both are under US sanctions and exempt from the voluntary reductions under the OPEC-led deal.
REGIONAL TENSIONS
Oil prices edged lower on Friday due to demand fears amid a standoff in Sino-US trade talks, but both benchmarks ended the week higher on rising concerns over disruptions in Middle East shipments due to US-Iran political tensions.
Tensions between Saudi Arabia and Iran are running high after last week’s attacks on two Saudi oil tankers off the UAE coast and another on Saudi oil facilities inside the Kingdom.
Riyadh accused Tehran of ordering the drone strikes on oil pumping stations, for which Yemen’s Iran-aligned Houthi militia claimed responsibility. 
Saudi Arabia’s minister of state for foreign affairs said on Sunday that the Kingdom wants to avert war in the region but stands ready to respond with “all strength” following the attacks.
“Although it has not affected our supplies, such acts of terrorism are deplorable,” Falih said. “They threaten uninterrupted supplies of energy to the world and put a global economy that is already facing headwinds at further risk.”
The attacks come as the United States and Iran spar over Washington’s tightening of sanctions aimed at cutting Iranian oil exports to zero, and an increased US military presence in the Gulf over perceived Iranian threats to US interests.