Days after teaming up with China and Russia to join the Shanghai Cooperation Organization, Saudi Arabia sent a delegation to Tehran to reestablish diplomatic ties — at China’s behest — in a move that further undermines the US-led world order..Although it was ostensibly to negotiate an end to the war in Yemen, the real reason is to facilitate a global realignment away from the Western dominated economic and political status quo, according to the influential Foreign Policy magazine.. Long March ChinaStatue in Tiananmen Square commemorating Mao’s Long March. .As the Western Standard reported last week, it’s just the latest development that sees the world’s largest oil exporter align with China and Russia in a bid to displace the US dollar as the world’s reserve currency and hence, its role as the world’s only superpower. And the way to do that — no surprise — is with oil, which is almost exclusively denominated in US dollars..As previously noted, oil long ago displaced gold as the world’s ultimate liquid asset, powering the global economy. Everything from financial markets to the actual production, manufacturing and transportation of daily necessities like food depends on it..It’s also essential to powering the war machines of aspiring dictators. The Green Revolution has yet to catch up with the military-industrial complex and armies still need lots of the black stuff to wage wars of naked aggression in Ukraine, for example. Or plot future ones in Taiwan.. Tiananmen SquareRed flags over Tiananmen Square. .Equally no surprise then, both Saudi and Iran happen to be major oil producers and OPEC colleagues. When it isn’t cutting production, Saudi is the world’s largest (followed closely by the US and Russia). Iran — when it isn’t under sanction — is fourth or fifth, slightly ahead (or behind) Canada..The problem for major oil importers like China — the world’s largest — is that OPEC is a rather bitchy clique who argue like schoolgirls at the prom. The internal politics are brutal, with various member states plotting assassinations and coups where they’re not pursuing nuclear weapons or invading each other. Mexican drug cartels are more unified in purpose and vision..When I covered the Third OPEC Summit in 2007, Libya was excluded from attending after Muhammad Gaddafi was accused of plotting to assassinate the host, King Abdullah. Iran was still seeking reparations from Iraq for a brutal war that saw each side gas each other with chemical weapons for eight years. That conflict only ended after Iraq invaded Kuwait over production quotas..Caught in the middle of it all was Saudi, that had to rely on the US Fifth Fleet and Stormin’ Norman Schwarzkopf to support its position as head of the fragile cartel. That in turn set off a whole other series of events that culminated in the skies over Manhattan on Sept. 11, 2001 and are still being felt today.. Saudi human rightsSaudi Arabia has been criticized for its human rights record, especially its treatment of women. .In September 2021 — almost 20 years to the day — US President Joe Biden declassified a secret FBI report detailing ties of 911 hijackers to Saudi nationals living in the US over objections from the Saudi government. Those connections still aren’t clear decades later..The point is, Saudi isn’t feeling too secure these days, especially with ongoing civil wars on its borders and countries like Iran and Pakistan loading up on nukes..Whether it is criticism from Biden over its rights record, or accusations of hacking up American journalists with a meat saw, it has every reason to feel abandoned by its main benefactor..By mediating its conflict with Iran — something the US has been unable to do — China is offering a sense of security and potential stability in the Middle East that frees Xi Jinping to pursue his maximalist goals in Asia Pacific..The way to do that, of course, is to displace the Greenback as the world’s dominant currency. And the way to accomplish that in turn is to break the US hold on the oil market..By bringing together three of the world’s top five oil producers, China is in essence going for the soft underbelly of American economic power while assuring supplies for its war machine..Even when I was in Riyadh there was talk of accepting oil payments in other currencies. The majority of OPEC members are vehemently anti-American — Iran, Iraq, Libya, Venezuela, et al — and they had been clamouring for Saudi to use the “oil weapon” against the US for decades..It seems China has finally beat them to it..Displacing the US dollar as the default payment for petroleum would allow Xi to ’buy direct’ from the world’s largest wholesaler without having to deplete its own stash of US currency reserves. It would also help Russia — whose partnership ‘knows no bounds’ according a joint communique signed by Xi and Vladimir Putin in Moscow last month — skirt oil sanctions and the price cap on its own crude..That declaration in Moscow could have just as easily been penned by Stalin and Ribbentrop circa 1939. It all feels like a prelude to some something bigger. The next shoe to drop..As Winston Churchill once wrote — and he wasn’t often wrong — “Those that fail to learn from history are doomed to repeat it.”
Days after teaming up with China and Russia to join the Shanghai Cooperation Organization, Saudi Arabia sent a delegation to Tehran to reestablish diplomatic ties — at China’s behest — in a move that further undermines the US-led world order..Although it was ostensibly to negotiate an end to the war in Yemen, the real reason is to facilitate a global realignment away from the Western dominated economic and political status quo, according to the influential Foreign Policy magazine.. Long March ChinaStatue in Tiananmen Square commemorating Mao’s Long March. .As the Western Standard reported last week, it’s just the latest development that sees the world’s largest oil exporter align with China and Russia in a bid to displace the US dollar as the world’s reserve currency and hence, its role as the world’s only superpower. And the way to do that — no surprise — is with oil, which is almost exclusively denominated in US dollars..As previously noted, oil long ago displaced gold as the world’s ultimate liquid asset, powering the global economy. Everything from financial markets to the actual production, manufacturing and transportation of daily necessities like food depends on it..It’s also essential to powering the war machines of aspiring dictators. The Green Revolution has yet to catch up with the military-industrial complex and armies still need lots of the black stuff to wage wars of naked aggression in Ukraine, for example. Or plot future ones in Taiwan.. Tiananmen SquareRed flags over Tiananmen Square. .Equally no surprise then, both Saudi and Iran happen to be major oil producers and OPEC colleagues. When it isn’t cutting production, Saudi is the world’s largest (followed closely by the US and Russia). Iran — when it isn’t under sanction — is fourth or fifth, slightly ahead (or behind) Canada..The problem for major oil importers like China — the world’s largest — is that OPEC is a rather bitchy clique who argue like schoolgirls at the prom. The internal politics are brutal, with various member states plotting assassinations and coups where they’re not pursuing nuclear weapons or invading each other. Mexican drug cartels are more unified in purpose and vision..When I covered the Third OPEC Summit in 2007, Libya was excluded from attending after Muhammad Gaddafi was accused of plotting to assassinate the host, King Abdullah. Iran was still seeking reparations from Iraq for a brutal war that saw each side gas each other with chemical weapons for eight years. That conflict only ended after Iraq invaded Kuwait over production quotas..Caught in the middle of it all was Saudi, that had to rely on the US Fifth Fleet and Stormin’ Norman Schwarzkopf to support its position as head of the fragile cartel. That in turn set off a whole other series of events that culminated in the skies over Manhattan on Sept. 11, 2001 and are still being felt today.. Saudi human rightsSaudi Arabia has been criticized for its human rights record, especially its treatment of women. .In September 2021 — almost 20 years to the day — US President Joe Biden declassified a secret FBI report detailing ties of 911 hijackers to Saudi nationals living in the US over objections from the Saudi government. Those connections still aren’t clear decades later..The point is, Saudi isn’t feeling too secure these days, especially with ongoing civil wars on its borders and countries like Iran and Pakistan loading up on nukes..Whether it is criticism from Biden over its rights record, or accusations of hacking up American journalists with a meat saw, it has every reason to feel abandoned by its main benefactor..By mediating its conflict with Iran — something the US has been unable to do — China is offering a sense of security and potential stability in the Middle East that frees Xi Jinping to pursue his maximalist goals in Asia Pacific..The way to do that, of course, is to displace the Greenback as the world’s dominant currency. And the way to accomplish that in turn is to break the US hold on the oil market..By bringing together three of the world’s top five oil producers, China is in essence going for the soft underbelly of American economic power while assuring supplies for its war machine..Even when I was in Riyadh there was talk of accepting oil payments in other currencies. The majority of OPEC members are vehemently anti-American — Iran, Iraq, Libya, Venezuela, et al — and they had been clamouring for Saudi to use the “oil weapon” against the US for decades..It seems China has finally beat them to it..Displacing the US dollar as the default payment for petroleum would allow Xi to ’buy direct’ from the world’s largest wholesaler without having to deplete its own stash of US currency reserves. It would also help Russia — whose partnership ‘knows no bounds’ according a joint communique signed by Xi and Vladimir Putin in Moscow last month — skirt oil sanctions and the price cap on its own crude..That declaration in Moscow could have just as easily been penned by Stalin and Ribbentrop circa 1939. It all feels like a prelude to some something bigger. The next shoe to drop..As Winston Churchill once wrote — and he wasn’t often wrong — “Those that fail to learn from history are doomed to repeat it.”
