Will China & Saudi Arabia Be the Doom of the Dollar?

Hello everybody and welcome to Geopolitical Trends. My name is David Oualaalou. So good to be with you as always. Saudi Aramco company inked a $12.2 billion for China's oil refinery deal. Is this a loud and clear message to the US or what? In this video, I am going to provide you insights into how significant this development is and what it means for the global energy security moving forward. But before I'll do all this, I like to thank the channel's members and supporters, and of course you, the subscribers. And if this is your first time and if you like the content of this channel, please make sure to subscribe and smash that notification button so you will be notified every time I upload a new video. And thank you all for your continued support. Let's dive in into this because it's not been reported yet. You know, you're gonna be here hearing about it soon, but it's very significant and I'm gonna tell you why. So Saudi Aramco, which by the way, Aramco company, it's worth about $1.8 trillion as of this year, as of 2023. So signed an agreement with the Chinese partners, not just with one company in China, Chinese partners. And I'm going to provide you the details on all this on, on, on Sunday, which was just March 26th, for an oil refinery and petrochemical project in the northeast part of China, which is expected to start in 2026. And the reason being is because in order to meet China's growing demand for fuel and chemicals. That, that should give you a hint right there. As to those who've been saying, and there are those who've been saying, that China's economy is going to collapse, it's nonsense. You know, they're calling themselves analysts, and how can you say something so stupid like that? You know, no offense to anybody here, but come on, it didn't make sense because this kind of deal will give you an idea about the— where the growth of China's economy is going to be going forward. So, so here's the thing. The project in Liaoning— I hope I pronounce it correctly— province, city of Pachin, Pachin, will be Aramco's second major refining petrochemical investments in China. Yeah, that's how significant that is. And it follows the world's top oil exporter reporting— this is Saudi Arabia, that is— reporting a record profit of $161 billion in 2022. Talk about sanctions on Russia. This is why the West was so dumb and so stupid to embark on such policy, because it just end up boomeranging anyway. So, so the state-owned Aramco, which is owned by the Saudi government, that is, said in statements, and I quote, let me get the quote here for you guys, joint ventures Huaqin Aramco Petrochemicals, it goes by the, the ticker name of HAPCO, will build and operate the complex that will house a 300,000-barrel-per-day oil refinery and a cracker with an annual production capacity of 1.65 million tons of ethylene and 2 million tons of paraxylene. End of quote. That just shows you the amount of production that's going to be taking place, you know. The project is expected to cost about 83.7 yuan, or $12.2 billion, you know, and the partners, Panchin, uh, Xinjiang Industrial Group, said in a statement on, uh, uh, recently, that's what they mentioned about it. So the construction at the complex will start in the second quarter after the project secures the required administrative approval, of course. And, and because there is a protocol and process for all this. So, but the point is not about all this. The point is about what this is going to do to the global energy security. That is where the issue— that is where the, the thinking ought to be. And the second thing, it has to do also from a geopolitical perspective, how now Saudi Arabia is shifting completely towards China is pivoting. You know, we all know Saudi Arabia is a staunch ally of the US, but I think that era is gone. Saudis, like I said last time, and I did a video for you guys about this one here, Saudis are seeing where the trends are, are going, and they don't want to be left out when that train leaves the station. So that is what they are doing. So, so here's the thing: Aramco in this case will be supplying about 200,000 Yeah, 200— I'm sorry, 210,000 barrels per day of crude oil, you know, for this plant that they're going to be constructing. And I will provide you the link to all this so you know where the information is coming from. So state-owned in China, that is state-owned Norinco, called Norinco Group, which is a Chinese military equipment maker. Owns about 51% of the, the, uh, of this company, while Aramco and Pengxin, Pengxin, hold the stakes of about 30% and 19% respectively. On, on a separate deal, Aramco on March 26th, which was just 3 days ago on Sunday, signed the memorandum of understanding with the southern Chinese province of Guangdong to explore cooperation in sectors that includes energy— get this, guys— energy, finance, research, and innovation. Yeah, so, and, and, and to me, that just— it's clear as daylight where the trends are headed. So Guangdong, China's largest provincial economy, has drawn global firms. Yeah, that's why Guangdong, a provincial area, is, is very industrialized because it attracted the likes of ExxonMobil. Yeah, and BASF. What, BASF? If you know anything about BASF, is a European multinational chemical company and the largest chemical producer in the world. Yeah, it has plants in Guangdong. So, and each building is large-scale petrochemical complex producing high-value chemicals. That's what all this is heading out. So, and of course, we noticed the trends before the pandemic. As you may know, Aramco signed the two other initial agreements for refinery, uh, for refinement of petrochemical investments in China. Now, this is a huge, guys, it's especially if you happen to, uh, be interested in investments, opportunities, whatever, that's something you have to be aware of where the trends are, you know. This is how I see it, and that's the reason why I'm doing these videos with you guys, or share this knowledge with you, is to at least have a step ahead of others to be aware if there are any investment opportunities for you on today. So, and by the way guys, if you like the content of my videos, uh, please hit the like button to help me out with the algorithm and subscribe if you have not done so. I will truly appreciate your support. So, so here's the thing, all these projects, you know, the ones that I mentioned earlier Then you add to them, for example, what's taking place in an area called Zhejiang Provincial— I hope I pronounce it correctly. So because in Zhejiang, a company, this is a petrochemical corporation, is about to invest 9%, you know, into this project. Why? Because it is considered this is where China has a single largest refinery that can process— get this, guys— about 800,000 barrels of oil per day. Yeah, this is why it's significant. The other location is in, uh, Shandong— or the other company, rather, I'm sorry. The other company is Shandong Energy that includes the potential crude supply agreements and chemical products offtake the deal, as well as exploring collaboration on an integral refining and petrochemical complex in China. And this is why I used the term earlier, the global energy security, because that's what this is all about. China is the largest oil importer. Saudi Arabia is the largest oil producer. This has to do with global energy security. You know, they want to ensure that Saudis have a market where they can sell their oil and make profit. And China wants to ensure that it has access to resources where it's going to import unlimited amount of oil. That's what's at the heart of all this. And who's going to end up holding the end of the stick? Yes, it's the United States and the collective West. That's what it is. So here's my conclusion for you, because I always like to keep this short, uh, brief and concise. So China's status— get this, guys— China's status as Saudi Arabia's biggest trading partner makes sense. To me, it does. Any, any pragmatic person will say it makes perfect business and strategic sense, you know, considering its recent economic growth and focus for China. That's what it is. So China, like I said earlier, China is the largest buyer of crude oil in the world. Yeah, and it buys from Saudi Arabia more than any other place, almost half. Here's the thing, almost half of the, uh, I had a chance to read up the profit when it comes down to the trade between Saudi Arabia and China. So half of the $87.3 billion in bilateral trades between China and Saudi Arabia, between the two nations in 2021, that's what the amount was, was comprised of China's crude oil import. And this by itself accounted for, get this guys, 77 of China's total imports from Saudi Arabia, which also of course includes other goods and other petroleum products. Saudi Arabia meanwhile imported about $30 billion US worth of goods including— from China that is— including technological equipment, telephones, and light fixtures. So, so it is fair, in my opinion, it is fair to say the Saudis have officially pivoted east toward China, ditching the United States and the collective West altogether, because that's the scene where the trend is headed. So, and it makes more perfect sense. So make sure, guys, to leave me some comments. I always like to read your comments and leave me some questions if you would like to further this in a live stream conversation. We can do it on this upcoming weekend, and I'll be happy to do it. So as always, guys, remember, geopolitics impacts your daily life in more ways than one. Till next time, guys, bye-bye.