Xi Jinping’s expected arrival in the Gulf state for a China-Arab summit comes as the kingdom and other members of the OPEC Plus alliance are at odds with the United States over oil supplies and Russia’s war in Ukraine.
Observers say Xi’s trip could be another step in the westward expansion of the SCO, with China growing not only as a trade partner but also an investor in the Gulf’s lucrative energy sector.
“It’s going to be a very, very energy-focused meeting,” said Raffaello Pantucci, a senior fellow at the S. Rajaratnam School of International Studies in Singapore.
“It’s also going to be another meeting that’s focused in this direction because what we’ve seen with the Saudis is a clear reticence by them towards the United States.”
The US ties with Saudi Arabia, the world’s biggest crude oil exporter, and other suppliers in the OPEC Plus alliance, soured after they decided to sharply cut production to support prices.
The US said the decision would worsen global inflation and support Russia’s oil revenue from China and other markets that is used to fund war efforts in Ukraine
Nevertheless, Saudi Arabia remained China’s biggest source of oil in October, according to Chinese customs data. It is also an SCO dialogue partner interested in an upgrade to observer status.
Pantucci said the Gulf’s tensions with the US presented an opportunity for China in Riyadh.
“The Chinese want to capitalize on that and highlight the fact that Saudi Arabia is a great independent country who works with us happily. I think that’s one narrative they want to push out,” Pantucci said.
Elsewhere in the Middle East, Egypt and Qatar have also become SCO dialogue partners, and sanctions-battered Iran – whose largest petroleum customer is China – passed a bill late November to join the group.
Russia, China’s second-biggest oil supplier, is a founding member.
Li Lifan, head of the SCO centre at the Shanghai Academy of Social Sciences, said that once Iran joined the group, it could help the SCO expand its energy club – a Moscow-led platform for SCO countries to discuss energy trade without binding commitments.
SCO leaders have already identified the transition towards renewable energy sources as an area for cooperation, with ambitions of developing a common energy strategy across Eurasia.
Beijing has touted the 3,666km (2,280-mile) Central Asia-China pipeline that supplies natural gas from Turkmenistan to China as a success, and in November Chinese Premier Li Keqiang called on SCO counterparts to advance cooperation over energy security.
However, there are questions about the SCO’s role beyond dialogue on securing energy for China and counterbalancing Western energy interests in the region.
Pantucci said the focus in the West was more on tangible outcomes, which the SCO did not appear to generate.
“I think the problem in the West, at least the Western analysis, is an obsession with things, doing things, and this organization doesn’t do much,” Pantucci said. “Our collective response in the West is, ‘Well, it doesn’t do much then it can’t be important.’”
But he said the SCO membership would help Iran rhetorically, and practically, allowing it to take part in regular talks with other countries.
“Who knows what benefits might come from there?
“For Iran, to be able to associate itself with such a structure and be a member of it shows the Iranian people, for one thing, and it shows the world that Iran isn’t an isolated country.”
Li, the SCO researcher in Shanghai, agreed that Iran could use the group as a platform to grow its influence against what it sees as hegemony from the West.
“Even if it is being squeezed out in the United Nations, at least the SCO can give it a platform every year for its ministers, department heads, state leaders and prime ministers. That way, it can have a say in the international arena,” he said.
Li said the SCO could play a further role in reducing the use of US dollars in energy trade by promoting local currencies, pointing to a Russia-China gas deal denominated in the rouble and the yuan.
Sana Hashmi, a postdoctoral fellow at Taiwan-Asia Exchange Foundation in Taipei, said that while the SCO was not developed as an “anti-West coalition”, China had become an economic guarantor to SCO countries, and the group could keep US influence out of Central Asia.
One advantage China had over the US was its willingness to cooperate with no strings attached, she said. “Every country has a very different reason why they are becoming anti-West, but at least they have a common reason to be a part of something like SCO.”
