Chinese President Xi Jinping (L) is greeted by Saudi Arabia’s Crown Prince Mohammed bin Salman Al Saud (R) at Yamamah Palace in Riyadh, Saudi Arabia on December 8, 2022.
Anadolu Agency | Anadolu Agency | Getty Images
China and Saudi Arabia have stressed the importance of stability in the global oil market and Riyadh’s role in achieving this balance, following a three-day visit to Saudi Arabia by Chinese President Xi Jinping.
“The People’s Republic of China hailed the Kingdom’s role as a supporter of balanced and stable world oil markets, and as a reliable major exporter of crude oil to China,” a joint statement said. published by the Saudi Press Agency in Riyadh.
China is the world’s largest importer of crude oil, while Saudi Arabia is the largest exporter of these resources and chairs the influential OPEC+ producer alliance.
Xi met with both King Salman bin Abdul-Aziz Al Saud and his heir, Saudi Crown Prince and Prime Minister Mohammed bin Salman, according to China’s official Xinhua news agency. The talks have so far resulted in the signing of a “comprehensive strategic partnership agreement” and 12 agreements and memorandums of understanding on topics including hydrogen, direct investment and economic development.
The two countries affirmed on Friday that they would continue to ‘firmly support each other’s core interests’, sovereignty and territorial integrity, pledging joint cooperation to ensure the ‘peaceful nature of Iran’s nuclear program’ and urging cooperation of Tehran with the International Atomic Energy Agency.
The Chinese head of state invited King Salman to visit China “at a mutually agreed time”, the statement said.
Xi arrived in Riyadh on Dec. 7 for a three-day visit at a time when Beijing seeks to revitalize its economy, while Saudi Arabia nurtures eastern ties after an energy policy dispute with the United States.
Washington closed a rift with Riyadh on December 6 with the District of Columbia’s federal court dismissing a lawsuit against Saudi Crown Prince Mohammed bin Salman, accused of murdering dissident American journalist Jamal Khashoggi. The decision followed a recommendation by US President Joe Biden’s administration that the prince should be granted sovereign immunity, following his appointment as Saudi prime minister through an exemption from Riyadh’s code of government, weeks previously.
Saudi and US energy interests continue to diverge. Washington has repeatedly urged OPEC+ to release new crude supplies to markets and ease the burden on consumers facing limited access to energy following Russia’s invasion of Ukraine and sanctions that resulted. OPEC+’s October decision to cut production quotas by 2 million barrels a day from November, which was confirmed on Dec. 4, led to a brief war of words between U.S. and Saudi officials.
The timeline of China’s economic rebound frames the demand outlook for crude markets, which remain rocked by concerns about the broader global appetite for transportation fuels amid rising inflation rates and signs of recession.
On the supply side, energy markets are awaiting more clarity on the impact on Russian production of an EU ban that came into force on December 5. Along with its implementation, a program of the world’s largest G-7 economies aims to facilitate shipping and transportation services. for non-G7 Russian purchases made under a price cap.
The Brent crude contract for February delivery was trading at $76.13 a barrel at 11:55 a.m. London time on Friday morning, down 2 cents from the Dec. 8 settlement. The first-month Nymex WTI contract was at $71.79 a barrel, adding 33 cents to Thursday’s closing price.