Showdown between Saudi Arabia and Russia over Ukraine and oil

Showdown between Saudi Arabia and Russia over Ukraine and oil

Mohammed Bin Salman, Crown Prince and Prime Minister of Saudi Arabia, is the de facto ruler due to the deteriorating health of his father, King Salman. His popularity, unquantifiable in Arabia in the absence of an independent investigation, is highest in the rest of the Arab world, where the press is not shy about comparing him to a ‘new Nasser’.

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One such favor, according to one American editorialist, is the “finger of honor” inflicted on Joe Biden by Mohammed Ben Salman in July 2022. The latter had in fact moved to Jeddah to achieve a significant increase in Saudi oil production, which was key to driving down the price of gasoline at the pump in the United States.

That motion, formulated in the run-up to America’s midterm elections, was categorically rejected by Mohammed Bin Salman, a determination that is a large part of his current aura in the region.

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Goal: $80

As well as being the most powerful economy in the Arab world, Saudi Arabia has a population of 32.2 million, according to a recent census, including 18.8 million Saudis (two-thirds of whom are under the age of 30), where nationals of others Petroleum and petroleum industries live. Monarchies represent a very large minority on their own territory (10% in the United Arab Emirates, for example).

Mohammed Ben Salman has dedicated himself to this demographic dynamic in his “Vision 2030”, a comprehensive modernization program at high speed, supported by a number of projects that are as futuristic as they are controversial. But in order to achieve this goal, the Saudi head of state must keep the price of a barrel of crude oil at at least $80. Hence the snub from Biden in July 2022.

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The Saudi head of state entrusted this strategic act to his half-brother, Abdelaziz Ben Salman, the oil minister. The Organization of the Petroleum Exporting Countries (OPEC), founded in 1960, was expanded in 2016 to include ten new members, including Russia, for OPEC+. And it is a privileged partnership between Riyadh and Moscow that has enabled oil price regulation ever since.

The $80 a barrel target seemed within reach in April. However, the deadlocked state of Russia in the Ukraine, which is selling increasing quantities of oil via third countries to finance its aggressive campaign, was not to be expected. India thus saw the share of its oil imports from Russia increase from 1% to 40%, with transactions well below $60 a barrel, the cap set by the G7 in December 2022 to avoid Western sanctions.

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