One should never let a crisis go to waste — and Saudi Arabia isn’t. The kingdom is using the Ukraine-Russia tension to re-establish itself not only in energy markets but global politics.
The Saudi royal family has weathered four difficult years. The assassination of Washington Post columnist Jamal Khashoggi in Istanbul in October 2018 badly tarnished the kingdom. The war in Yemen, where Riyadh is fighting Iranian-backed Houthi rebels, has dragged on, damaging its reputation as a regional hegemon. In 2020, oil prices plunged during the Covid pandemic, crushing the Saudi economy. Then Joe Biden arrived at the White House in early 2021 with a promise, made during the presidential election campaign, to turn the kingdom into a “pariah.”
But now the Saudis are back in business — just over a year since Biden took over from their staunch ally, Donald Trump. The revival has been going on for a while, but the crisis in Ukraine — and fears about the disruption of Russian energy flows — is accelerating it. According to the International Energy Agency, Riyadh controls 55% of the global crude oil production capacity that can be tapped in short order to cushion any stoppage. It’s a powerful tool in a world worried about rising oil prices and inflation.
With Brent crude approaching $100 a barrel and Saudi production on its way to the highest annual average, Riyadh is making more money than at any time since King Salman ascended to the throne in January 2015. On current trends, the kingdom will earn $375 billion pumping oil this year, the second-highest amount ever. It’s more than double the $145 billion it made in 2020.
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