Xi visit to Saudi Arabia brings pledge of more oil trade

Bloomberg

China is willing to expand oil trade with Saudi Arabia, Chinese President Xi Jinping said during a visit to the kingdom that reinforced ties between the world’s No. 2 economy and its top supplier of crude.In a meeting in Riyadh on Thursday, Xi and Crown Prince Mohammed bin Salman also agreed to hold summits every two years as they upgraded the relationship to a comprehensive strategic partnership, the official Xinhua News Agency reported. The Chinese leader was set to meet more Arab leaders on Friday.

The summit comes as ties between the US and Saudi Arabia have frayed over oil policy. China will seek to strengthen coordination with Saudi Arabia on energy policy and exploration, a statement from the Chinese foreign ministry said. Saudi Arabia, along with Russia, is the de facto leader of OPEC+, a producers’ cartel that pumps roughly half the world’s oil.

Saudi Arabia’s daily exports of crude to China have averaged 1.65 million barrels this year, according to data compiled by Bloomberg. That’s worth around $130 million at today’s prices.

There was no mention of the idea that Saudi Arabia may accept yuan payments for oil instead of the dollar, as was reported earlier this year. Diplomats and analysts said at the time the reports should be seen as a political message to the US, rather than the kingdom’s plans, partly because the Saudi riyal is pegged to the dollar to shield from price volatility. The two nations also signed a slew of energy and investment pacts, though details were scant. They announced plans to synchronize Xi’s signature Belt and Road infrastructure program with the kingdom’s Vision 2030, which aims to wean the economy off its reliance on oil.