New age oil war is ostensibly drawing closer to engulf Middle East. A new Ukraine like crisis may be in the offing. The natural fossil fuel and gas known to have alleviated scores of human populations and helped fast development of the modern world might become a stirrer of a great cataclysm in coming days; courtesy political intrigues of world powers. Kingdom of Saudi Arabia once known as her closest ally is seemingly slipping away from the grip of American containment.
The Crown Prince of KSA has not been a loyalist over the past few years as experienced by Washington. The relations started souring with the murder of Saudi Journalist Jamal Khashogi in Turkey in 2018 for which Washington damned the Crown Prince. Bin Salman’s proximity to China and Russia has been of greater concern to Washington. The Crown Prince MBS is known to have brought a series of reforms in KSA; deemed to kick start non-oil based economy reducing the burden of fast exhaustion of natural oil resources.
This has worried Washington because her economic sanctions imposed on Russia on Ukraine debacle are practically failing in the wake of many fold increased oil and gas production by Moscow in the world market that is luring consumer nations to purchase oil and gas at cheaper rates from Russia. Washington had earlier urged OPEC countries to equally increase oil production into the global market so as to keep oil prices cheaper and thus keep Russia at bay. Not withstanding, the OPEC countries of which Saudi Arabia, United Arab Emirates, Qatar, and Kuwait are key partners refused to yield to US demands. The Crown Prince does not seem to be reckoning since he has readied his Kingdom for what he called a holy war. Infuriated and desperate at this, Joe Biden administration has chosen to take stern action, particularly against KSA, which the Washington believes to spearhead the vexation.
In the meanwhile Biden has urged the US to pump out oil into the market from her huge strategic oil reserves meant for emergency and war time to control oil prices. Imposition of economic sanctions termed as “economic terrorism” in modern economics remains to be a fourth generation war tool often adopted by global powers to monopolise the control. Iran is the worst hit nation. Washington beyond doubt has limited choice this time. Imposing economic sanctions would not be inclined to yield favourable results for Chinese and Russian block putatively would not leave their newly emerging ally haplessly. The greater vexation that is on the mind of Washington is the real issue of Petro-dollar being in peril at the hands of economic and oil giants like China, Russia and OPEC; of which Saudi Arabia is the torch bearer.
This has at several times came to limelight that China, Russia and Saudi Arabia were actively mulling to sell oil in their local currency, Yuan, Rubel or Riyal that would mark the beginning of the downfall of Dollar in the international market. There were media reports that Germany and France have already entered into a deal with Russia to purchase oil and gas from Moscow in Ruble. If true, worries would be greater for Washington. It is learnt from past quite sometime that China is embroiled in Saudi Arabia’s missile development programme and Russia is reportedly soon replacing US to provide antimissile shield to Riyadh after US removed her antimissile security cover to KSA last year.
The second option for Washington in the face of failure of economic sanctions on KSA would be a direct conflict or a mercenary spiralled disruptive operations in the guise of ISIS type Sturm and Drang. Whereas the former has little opportunity to take form in the strong possibility of getting China and Russia entangled in the conflict, and US might have to see yet another Syria taking place in Saudi Arabia; the indirect conflict propelled through armed rebellion has greater chance and would fully destabillise KSA as it did with Iraq and Syria and Yemen. Pertinent to mention that this is for the first time in the recent history when the oil producing Middle East Arab countries have shown integrity and uniformity in their policy defending their national stakes and unyielding to foreign pressure. This is deemed to encourage MBS in his standing with US on the current oil fiasco. What has to be watched onwards is wether the Sino-Russian friends in the camp that is thought to constitute Iran-Turkey-Pakistan-Afghanistan-Central Asia leave KSA and the Middle East Oil giants alone to be mauled by mighty US hounding forces or come to their rescue in the coming hour of crisis.
Disclaimer: The views and opinions expressed in this article are the personal opinions of the author. The facts, analysis, assumptions and perspective appearing in the article do not reflect the views of GK.