Oil has been at the heart of the Saudi-American economic relationship for eight decades, but that fact is changing as black gold no longer occupies the center on which the economic partnership between the two countries evolves.
It is worth noting that the United States itself is importing less shale oil after worldwide production has significantly increased, possibly putting it on the track to surpass Saudi Arabia and Russia in terms of production for 2018.
Last year, US imports of Saudi crude oil fell more than usual due to Saudi Arabia's policy of rolling back production along with Russia and the rest of the Organization of the Petroleum Exporting Countries (OPEC).
The oil-cut agreement between OPEC and non-OPEC producers forced the Kingdom to reduce its exports to the US in the second half of 2017.
US imports from Saudi Arabia show that since July 2017, the kingdom has not exported over 1 million barrels per day to the United States. It fell to 795,000 bpd, from a previous 1.015 million bpd in June, according to the US Energy Information Administration.
More so, US imports of Saudi oil fell to their lowest level since 1988 in October, reaching 563,000 bpd, almost half of what the US imported in the same month in 2016.
But the Kingdom can go back to boosting production to one million bpd—nevertheless, it is not likely for production to exceed a million bpd by far. It is difficult to assume that the Kingdom will return to exporting above 1.5 million bpd.
Saudi Arabia continues to share multiple energy partnerships and other oil sector interests with the US, as both countries are interested in stabilizing the oil market.
Saudi Aramco has the largest refinery in the US, the Motiva refinery in Port Arthur, which has a refining capacity of over 600,000 bpd.
Many Aramco officials, on different occasions, expressed the company’s desire to own new assets in the US. It is also looking for a new Liquefied natural gas (LNG) deal and has already spoken with some US companies, including Tellurian Inc, The Wall Street Journal reported months ago.
The US administration, led by President Donald Trump, combines the same approach with the Saudi government.
US Energy Secretary Rick Perry said in a Huston speech that the US will not take a hostile attitude toward fossil fuels, especially since many developing countries in the world need cheap and clean energy.
An important aspect of Saudi-US energy cooperation has recently emerged in terms of nuclear energy. The kingdom seeks to build its very own nuclear reactors for peaceful means of producing clean energy.
Competition seems to be building up on Saudi nuclear reactors, with the US showing strong interest following Russia's announcement on making a move towards building reactors to produce electricity in the kingdom.
Bloomberg reported that the US administration was considering allowing Saudi Arabia to enrich uranium in the kingdom for peaceful purposes, which would give preference to US companies wanting to build reactors in the kingdom, such as Westinghouse Electric Co., Exelon Corp. and others.
In Riyadh, Russian Energy Minister Alexander Novak said in a joint press conference with his Saudi counterpart Energy Minister Khalid al-Falih last month that Russia's Rosatom had asked the Saudi government to build nuclear reactors in the kingdom.
The kingdom plans to build 16 reactors for peaceful uses over the next 20 to 25 years, with investments amounting to $80 billion, according to the World Nuclear Association.
Saudi Arabia, which seeks to reduce domestic oil consumption, is considering building a nuclear power generation capacity of 17.6 gigawatts by 2032 and has sent a request for information from global suppliers to build two reactors.
Saudi Arabia has also attracted considerable attention from China and France, along with the US and Russia, to build nuclear reactors.
