China and Saudi Arabia are under pressure over the importance of global oil market stability and Riyadh’s role in achieving this balance, following a three-day Saudi meeting through Chinese President Xi Jinping.
“The People’s Republic of China praised the Kingdom’s role as a supporter of the balance and stability of world oil markets, and as the leading reliable exporter of crude oil to China,” said a statement carried through the Saudi Press Agency in Riyadh.
China is the world’s largest importer of crude oil, while Saudi Arabia is the world’s largest exporter of those resources and chairs OPEC’s influential Alliance of Producers.
Xi met with King Salman bin Abdul-Aziz Al Saud and his heir, Saudi Arabia’s crown prince and Prime Minister Mohammed bin Salman, according to China’s official Xinhua news agency. So far, the talks have resulted in the signing of a “comprehensive strategic partnership agreement. “and 12 agreements and memoranda on issues such as hydrogen, direct investment and economic development.
The two countries said Friday they will continue to “firmly defend each other’s basic interests,” sovereignty and territorial integrity, and pledged joint cooperation to ensure the “peaceful nature of Iran’s nuclear program” and urged Tehran’s cooperation with the International Atomic Energy Agency.
The Chinese head of state invited King Salman to stop in China “at a mutually agreed time,” he said.
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Xi arrived in Riyadh on Dec. 7 for a three-day stopover at a time when Beijing will revitalize its economy, while Saudi Arabia is fostering relations with the East after a power policy dispute with the United States.
Washington closed a rift with Riyadh on Dec. 6 with the U. S. District of Columbia federal court rejecting a lawsuit against Saudi Crown Prince Mohammed bin Salman, accused of the murder of American dissident journalist Jamal Khashoggi. The move followed advice via U. S. President Joe Biden’s management that the prince enjoy sovereign immunity, following his appointment as Saudi prime minister through an exemption from Riyadh’s government code weeks earlier.
Saudi Arabia-U. S. energy interests continue to diverge. Washington has continually suggested OPEC release new raw materials into markets and ease the burden on consumers facing limited access to energy in the wake of Russia’s invasion of Ukraine and the resulting sanctions. OPEC’s October resolution to reduce production quotas through 2 million barrels consistent with the November day, which was shown on Dec. 4, led to a brief war of words between U. S. and Saudi officials.
The timing of China’s economic rebound frames the demand outlook in crude markets, which was hit by considerations about broader global appetite for transportation fuels amid emerging inflation rates and recession signals.
On the source side, energy markets are waiting for more clarity on the impact on Russian production of an EU ban that came into force on December 5. In parallel to its implementation, a G-7 timeline of the largest economies aims to facilitate shipping and transportation services for Russian non-G7 purchases under a value cap.
The Brent crude contract for February delivery is trading at $76. 13 a barrel at 11:55 a. m. m. , London time, Friday morning, 2 cents less than the close on December 8. price.
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