Do You Think The Middle East Wants To See A More Stable Middle East So It Could Develop Industries That Do Not Heavily Rely On The Exports Of Fossil Fuels?
As usual, sometimes I get this light bulb that switches on in my head, and this is one of those times. I was watching "CNBC's full interview with Saudi Arabia's Economy Minister Faisal Alibrahim" YouTube video, and the content of the video is not the center of the focus for this blog post at all. Lately, as the world changes weirdly and fast right before my eyes that got me thinking rather deeply. In 2022, the Ukraine war happened, and this changed the world rapidly. Since this war, it seems every day, countries around the world began to take sides, either they're with the collected West or with countries that are friendly to Russia. Also, the United States began to sanction Russia heavily such as by cutting Russia from the SWIFT system. This would bar Russia from being able to sell oil in USD. Although at first, this was a big headache for Russia, eventually Russia found friends around the world that did not care about the United States sanction and began importing Russian oil heavily - albeit Russian oil priced at a deep discount.
We're now seeing some countries like China and Saudi Arabia start to make big decisions such as moving away from the dollar system of which the United States is the sole owner. If I'm not mistaken, since WWII, the United States USD had become the world reserve currency. This world reserve currency was cemented even more right after Saudi Arabia agreed to sell oil only in USD. The question is, why countries like China and Saudi Arabia begin to move away from the USD? I could be wrong, but it seems to me that right after the United States froze Russia's central bank reserves that were accessible by the collective West (including the USD reserve) -- pro-Russian countries or not - these countries seem to dislike the weaponization of the USD by the United States and starting to move away from the dollar system. China is in the process of heavily selling US treasury securities. China used to be the number one in holding US treasury securities but now they are number two. Japan is now number one in holding US treasury securities. Since late February of 2023, if my memory is correct, Saudi Arabia began to voice its dislike of the USD system by announcing the country is now welcoming other currencies in its oil trade.
If this is 2008 when China hosted the Summer Olympics, and if you're asking the question that will the world is moving away from the USD - people would think you're insane. The recent developments in China and Saudi Arabia are telling this very story. Furthermore, China's president Xi Jinping came to Saudi Arabia in 2023 to enhance the tie between the Chinese and the Saudis. On this trip, he publicly told the Saudis that he wanted to see Saudia Arabia accepts Yuan as the currency of payment for the oil trade between China and Saudi Arabia. If this is 2008, this is unthinkable. Meanwhile, the BRICS countries (China is one of the founder members) are starting to accept even more countries to join the BRICS. The founder members of the BRICS are Brazil, Russia, India, China, and South Africa. This seems to me like a new bloc that could form a formidable front against the collective West. If the rumors turn out to be facts, then we might see the BRICS accepts Iran, Saudi Arabia, Argentina, and a slew of other countries as BRIC members.
It's starting to daunt on me that many countries that want to join BRICS are composite of countries that heavily rely on fossil fuels. India and China heavily rely on importing fossil fuels. If Saudia Arabia joins BRICS, it becomes the second member of the BRICS that could control how the oil prices move. Currently, Russia is the only member of the BRICS that heavily rely on exporting oil and natural gas as strong sources of revenue. While we speak, China is the biggest oil customer for Saudi Arabia. So, I guess it makes sense for Saudi Arabia to see that its future is heavily relying on how well China is doing. A stronger China means a much stronger economy in which a thirst for more energy is sure to be certain -- this means China will have to import more fossil fuels even if it wants to develop its renewable energy industry. As China grows, its dependency on the Middle East grows ever more, thus I can see China will have a great interest in how the Middle East develops.
It shouldn't be a surprise to see China's role in the Middle East expands, but here in the United States and elsewhere were shocked that in March of 2023, China is able to break the ice between Saudi Arabia and Iran. Saudi Arabia and Iran were in proxy wars for the last seven years, and yet here China is able to facilitate a peace agreement between these two in Bejing. Now, Saudi Arabia and Iran promise each other that they will open their embassy in each other's countries. In the past, China's role in the Middle East wasn't all that prominent because China didn't actively steer the developments of the Middle East. It was the United States that steered how the Middle East developed. This facilitation of peace between Saudi Arabia and Iran by China is telling the world that China is now taking an interest in seeing how the Middle East develops. As Ukraine is distracting the United States away from the Middle East, China is filling the role of steering how the Middle East develops.
I think China wants to see a more stable Middle East so its Belt and Road Initiative could develop further. I don't think China fears that it would lose access to fossil fuels if the Middle East becomes unstable because even when the Middle East was unstable China was able to become the biggest oil customer of Saudi Arabia. Furthermore, Russia can always help boost the oil flow from Russia to China. I think the bigger picture is what China has in mind. China wants to secure a brighter future through Belt and Road Initiative. This is the new, modern silk road for China. Meanwhile, I think Saudi Arabia also knows that it could not forever rely on the trade of fossil fuels. This is why I think Saudi Arabia wants to join the BRICS to get closer to China's Belt and Road Initiative. Without the huge oil trade, Saudi Arabia's future must rely on something else. I think Saudi Arabia wants to become a hub of sorts to facilitate trade between the West and the East. To do this, I think Saudis see it's best to start with the Belt and Road Initiative. This way China could help Saudis to develop industries that would allow the Saudis to become a world hub that facilitates trade between the West and the East and everywhere else too. China is capable of helping the Saudis to build up its infrastructures that are going to be needed for new industries that would help the Saudis envision a grander future. For China, helping the Saudis build infrastructure can improve relations, create jobs for the Chinese, and provide a stability aspect to the development of the Belt and Road Initiative.
Anyway, as I was watching "CNBC's full interview with Saudi Arabia's Economy Minister Faisal Alibrahim" YouTube video, I thought why don't I ask Chat GPT (AI) about this sort of thing? My question to Chat GPT is as follows:
As the world is slowly moving away from fossil fuels to promote a greener future where climate change has less of an impact on modernity, is it in the interest of countries that rely heavily on fossil fuels to pivot to a more globalized world in which some of these heavily relied on fossil fuels countries are mainly in the Middle East in which they can become a connected hub for the world supply chain such as facilitating goods moving from East to West or vice versa?
Chat GPT's answer is as follows:
The transition to a greener future is a global effort that requires the participation of all countries, including those that heavily rely on fossil fuels. While it is important for these countries to explore alternative energy sources and reduce their dependence on fossil fuels, it is also possible for them to play a role in facilitating the transition to a greener future.
As you mentioned, countries in the Middle East that rely heavily on fossil fuels could become a hub for the world's supply chain, facilitating the movement of goods between East and West. This could be achieved by leveraging their strategic location, existing infrastructure, and expertise in the oil and gas industry to build a modern, efficient, and sustainable logistics network.
In addition to facilitating the movement of goods, these countries could also invest in renewable energy and carbon capture technologies to reduce their carbon footprint and contribute to the global effort to combat climate change. By doing so, they could position themselves as leaders in the transition to a greener future and attract investment and partnerships from around the world.
Overall, it is in the interest of all countries to work together to achieve a more sustainable future. While some countries may have more to gain or lose in the short term, the long-term benefits of a greener, more connected, and more sustainable world are undeniable.
How about you? What do you think about our future? Where are we heading? Are we going to see a more peaceful one or a more violent one? Will we see more countries team up to develop a more peaceful future? Will we see a future in which the world is more divided? If the world is more divided, will we fare better in such a future or will we experience one of humanity's darkest histories? Lastly, do you think the Middle East wants to see a more stable Middle East so it could develop industries that do not heavily rely on the exports of fossil fuels?