There are peace talks taking place between members the United States and Russia over the situation with Ukraine. Officials from that country are not being included.
What is interesting is not the fact that talks are occurring. The surprise is that, of all the places in the world, why Riyadh? Saudi Arabia isn't exactly known for being the mediators for peace agreements.
Is this simply about Russia and Ukraine or is there something greater going on?
In this article we will dive into a union that could have much broader implications.
What is the common denominator in this equation? When we think of the United States, Russia, and Saudi Arabia, what comes to mind?
The answer should be oil.
According to Grok, there are a bit over 100 million barrels of oil produced per day. The top three are as follows:
This is a combined of 35 million bpd. That is around 35% of the global production. When we look at the next 3 on the list (Canada, Iraq, and China) it only equates to what the US does. That is a large drop off.
An alliance of this nature could be very powerful. It is no secret that, even after the fall of the Soviet Union, tension between Russia and the US were tense. The neocons on both sides of the Atlantic did an exceptional job of stoking the fires.
It is no secret that the global situation is not working. Is this something that is being looked at.
Another component is the Middle East. The situation is a total mess at the moment. If the US pulls Saudi Arabia closer, this could exert more influence over the region. That country is seeking to push its economy further ahead, breaking from the past. A big part of this is major construction projects designed to make it, among other things, a tourism hotbed.
For all the discussion of renewables, there is little doubt that the future includes fossil fuels. Technology is not to the point where these forms of energy can push out enough to power what is needed. If we look at the expected energy use from data centers, we can see how the gap will only widen.
This is actually aligning with the Saudis move of late.
It’s all part of a wider shift. In recent years, Saudi Arabia has realigned its policies towards neutrality in global conflicts with the hope of attracting billions of investments that could help achieve “Vision 2030” – the crown prince’s plan to diversify the Saudi economy away from oil. Prince bin Salman has significantly pulled back from Yemen after years of war with neighboring Houthis, he is mending ties with regional rival Iran and has maintained close relationships with China and Russia – all while preserving the close Saudi relationship with the West.
Even though they are seeking to diversify the major components of its economy, oil is still going to play a major role. The benefit is the operations are already in place, allowing it to keep the revenues flowing without major investment.
Being part of a larger alliance could bode well for the kingdom.
Part of the global disruption could be to isolate China. China is still heavily dependent upon fossil fuel to power its economy. Pulling both these countries in could be an advantage to the United States.
Energy being vital to all conversations was shown in the tariff situation with Canada. One of the drawbacks for the US to impose tariffs is the fact that Canada exports a lot of energy to the US. By increasing the price of that, we see the potential to send prices higher in the US.
In addition to oil, each country has its own assets to bring to the table:
United States - economy
Russia - natural resources (minerals)
Saudi Arabia - money
Could this be a way to ultimately stymie China? Only time will tell.
At this point, all international actions should be viewed through the lens of United States and China.
