Chinese President Xi Jinping arrives in Saudi Arabia on Wednesday for three days of meetings with regional leaders likely focused on energy.
The overseas trip is only Xi’s third since the coronavirus pandemic began in 2020, and his first to Saudi Arabia, the world’s biggest crude oil exporter, since 2016.
It will feature bilateral meetings with Saudi King Salman and Crown Prince Mohammed bin Salman, the de facto ruler, as well as a summit with the six-member Gulf Cooperation Council and a wider China-Arab summit, Saudi state media reported.
Oil markets are expected to be a top agenda item for talks between China, the world’s biggest crude consumer, and Saudi Arabia, especially given the turmoil the markets have experienced since Russia invaded Ukraine in February.
The G7 and European Union on Friday agreed to a $60-per-barrel price cap on Russian oil in an attempt to deny the Kremlin war resources, injecting further uncertainty into the markets.
On Sunday, the OPEC+ oil cartel led jointly by Saudi Arabia and Russia opted to keep in place production cuts of two million barrels per day approved in October.
Saudi and Chinese officials have provided scant information about the agenda, though Ali Shihabi, a Saudi analyst close to the government, said he expected “a number of agreements to be signed”.
Beyond energy, analysts say leaders from the two countries will likely discuss potential deals — that could see Chinese firms become more deeply involved in mega-projects that are central to Prince Mohammed’s vision of diversifying the Saudi economy away from oil.
Those projects include a futuristic $500 billion megacity known as NEOM, a so-called cognitive city that will depend heavily on facial recognition and surveillance technology.
– Tensions with Washington –
The OPEC+ production cuts approved in October represented the latest blow to the longtime partnership between Saudi Arabia and the United States, which said they amounted to “aligning with Russia” on the war in Ukraine.
Xi’s visit is expected to be closely watched in Washington, which entered into what is often described as an oil-for-security partnership with Saudi Arabia towards the end of World War II.
While the Biden administration has smarted over the production cuts, Riyadh has at times accused the United States of failing to hold up the security end of the bargain, notably after strikes in September 2019 claimed by Yemen’s Huthi rebels temporarily halved the kingdom’s crude output.
China and Saudi Arabia already work together on arms sales and production.
Yet analysts say Beijing cannot provide the same security assurances Washington does — nor does it wish to.
Nevertheless, if the Saudis are “looking to extract more security guarantees from the US… signaling that they have the opportunity of strengthening ties with China is something that suits them well,” said Torbjorn Soltvedt, of the risk intelligence firm Verisk Maplecroft.