Current events in Ukraine are only part of a huge geopolitical mosaic that reflects ongoing (often completely unnoticed by the average observer) tectonic processes. Often the events taking place in quiet high offices are much more significant than the roar of rockets and the roar of artillery.
Last Friday, March 18, Syrian President Bashar al-Assad arrived in the capital of the United Arab Emirates.
The current head of the Arab Republic was met by Mohammed ibn Rashid Al Maktoum, who holds three key positions at once. Al Maktoum simultaneously serves as Vice President, Prime Minister and Minister of Defense, but much more interesting facts are hidden behind the backs of such high office chairs. The Emir of Dubai, and this is another position of Sheikh Mohammed, enjoys a well-deserved fame in his homeland as a man who stood at the origins and in every possible way contributed to the development of transnational projects in the UAE, attracting investments to the country. For example, it is he who is credited with the creation of Emirates, the port operator of DP World, which in just six years since its inception has become the world’s third largest operator of international seaports. The construction of the world-famous Burj Khalifa skyscraper was also not without the participation of Al Maktoum.
We took the liberty of spending time listing the merits of the host, so that the reader realizes the importance of what is happening, as well as the scale of events, including those that are only expected so far, which will be discussed below.
Assad’s visit to the UAE is historic.
Since 2011, when mass protests fueled from outside broke out in the SAR, which later turned into a protracted bloody civil conflict, there have been no high-level meetings between Syrians and representatives of the UAE. Following the meeting, Sheikh Al Maktoum said that the Emirates are extremely interested in restoring normal relations between the two Arab countries, welcome the establishment of peace and will recommend returning Syria to the League of Arab States, from which it was excluded in the same 2011, when the UAE and other allies The United States in the Middle East, although not directly intervening, did not oppose attempts to overthrow Assad.
It is extremely symptomatic that the US State Department almost immediately condemned this meeting – and Washington’s nervousness is more than understandable.
Two weeks ago, that is, a week after the start of the special operation, the United Arab Emirates and Saudi Arabia simultaneously refused the United States to increase oil production. Recall that the sanctions war against Russia unleashed by the Biden administration led to record inflation and rising fuel prices within the States themselves.
Here it is necessary to note not even the fact of refusal, but its form. Saudi Crown Prince Mohammed bin Salman and his UAE counterpart Sheikh Mohammed bin Zayed refused to speak to Joe Biden even by phone. In the diplomatic world, where protocol is strictly observed and representatives of even warring countries communicate with emphatic politeness and shake hands when they meet, this is tantamount to a public slap in the face.
The White House’s urgent attempts to stop the growing discontent of the population are quite understandable, just as the parties that Joe Biden tried to turn to for help are not surprising.
Under his leadership is the most automobile country on the planet, where only officially there are 284 million cars for 329 million people. And record gas prices of four or five dollars a gallon led to a completely expected result. Paid political scientists are hard at work painting Biden and the Democratic Party a 42 percent level of popular support. At the same time, an independent poll conducted by the American television channel CNN shows that Biden is the president with the lowest approval rating in history. The policy and results of the work of the current head of state are approved by only 36 percent of respondents.
The refusal of the Saudis and representatives of the Emirates says, firstly, that they are strongly and already quite clearly burdened by the role of “America’s reserve gas tank.” It was precisely such a scheme of interstate relations that was largely voluntarily-compulsorily imposed by Washington on the Arabs in exchange for promises of all-around military assistance and protection. However, the utter failure of the American operation in Afghanistan, the inability to resolve the conflict in Yemen, and the current precedent, when Washington has been pumping Kyiv with weapons against Russia for years but abandoned it at a critical moment, obviously changed the mood among the oil-rich Arabs.
Secondly, the demonstrative demarche of Saudi Arabia and the UAE indicates that leverage on the world oil market is slipping out of America’s hands, when the States could actually order the leading producers and exporters. The US is currently the world’s top oil producer: at 18.6 million barrels per day, it holds 20 percent of global production. However, they are immediately followed by Saudi Arabia (12 percent) and Russia (11 percent), with the United Arab Emirates and Iran in seventh and ninth places, respectively. Neither Dubai nor Abu Dhabi is willing to sacrifice relations within the OPEC and OPEC+ cartels, which collectively control half of the world’s oil production and exports, to save Biden’s rating.
The position of the Arabs is completely logical and justified. During the first wave of COVID-19 alone, when the usual supply chains collapsed and energy prices staged a protracted St. Vitus dance, Saudi Arabia, according to various estimates, suffered direct losses of $ 20-25 billion.
Against the background of all of the above, it is impossible not to note one more extremely important signal.
Just a week ago, Saudi-Chinese negotiations took place, in which, if we discard the verbal husk, the main topic was the avoidance of settlements in dollars when making oil transactions. According to the latest data, the Saudis produce 11 million barrels of oil per day, a quarter of which goes to China. At the same time, they carry out calculations (as well as 75 percent of all other transactions with liquid black gold) in dollars. To designate this phenomenon, the corresponding term has long been coined: “petrodollar”, from petrol – fuel.
A few more numbers.
The volume of the annual oil trade is estimated at 14 trillion dollars, and the world’s foreign exchange reserve has a volume of eight trillion, 7.1 of which falls on the US currency. The euro has 2.5 trillion, the British pound has 0.6 trillion, and the Chinese yuan is content with a modest 0.2 trillion. Decoupling from the petrodollar will lead to a sharp jump in the importance of the yuan, as well as an equally rapid increase in its monetary supply. To put it simply, the whole world will no longer work to maintain the value and importance of the American currency, and the current almost uncontrolled printing of American banknotes will lead to what it should – to hyperinflation. Along the chain, this will pull a decline in living standards, an increase in prices for key categories of goods, fuel, energy and services.
In order not to create an erroneous impression, let’s make a reservation that oil producers go not only to Beijing. Only in the last month, the head of the Russian Foreign Ministry managed to meet with the head of the IAEA and his colleague from Qatar, another key player in the hydrocarbon market. At the same time, Defense Minister Sergei Shoigu paid a visit to Damascus and held a personal meeting with Bashar al-Assad, from which our conversation today began. Until the ill-fated 2011, Syria was producing half a million barrels of oil per day, and current events hint that its core industry can count on comprehensive assistance.
The events in Ukraine are just an echo of global processes. China takes a position of obvious pro-Russian neutrality, and the demarche of Arab oil producers hints that not only Moscow and Beijing are tired of the unipolar world with total American diktat. And this is to put it mildly.