In Moscow, the illuminated signages of all but a few US brands have dimmed. Unlike its peer Burger King, McDonald's has closed over 847 branches across Russia. Major companies like Apple, Boeing, Adidas, the Marriott Hotels, and Citibank have followed suit. The political climate has reached unprecedented levels of tension. From both the Russian and the American viewpoints, this is an existential conflict where all means, bar direct armed confrontation, are utilized.
While Iran stands on the verge of leaving its decades-long confine of international isolation and boycott, Russia is being hit by harsher Western economic sanctions and isolation. On the Chinese side, the conflict with the US rages on.
As tensions soar, the world is rediscovering the key role that petroleum sources and passages play in geopolitical conflicts and re-establishing the importance of building alliances.
By the end of last year, environmental slogans and calls to lower oil production took over the international scene. Today, the calls have shifted to demanding more oil production.
Saudi Crown Prince Mohammed bin Salman had previously broached the issue of the future of Saudi Arabia and petroleum in light of the major shifts taking place in the world and the allegedly ebbing role of petroleum and plummeting oil incomes, saying Saudi Arabia is boosting its non-oil resources, but oil will remain a necessity for the world until the 2050s.
The current oil shock was not only prompted by the Ukraine war, but also by consumer markets’ return to full capacity after a two-year near-hiatus due to COVID-19.
To a certain degree, there are no new, resolute choices today more than in the past century. Energy sources are still relevant, maritime passages are still vital for traffic, and geopolitical balances still occupy a significant portion of the considerations of major powers and war institutions like the NATO.
The truth is, oil was never left out of the equation in conflicts, and its significance will only increase with the continued Chinese-US conflict and the Russian-Western war in Ukraine, which transported us and the whole world to a new stage. These recent developments call for a deeper consideration of how a key petroleum-rich region can avoid conflicts and remain in the shade of tensions.
Navigating such a complex situation may prove difficult. Most oil exports from the Gulf region - especially from the Kingdom, its largest country - go to India and China, yet ties with Europe and the US remain strong. At the same time, achieving a balance in the oil market requires cooperation between Gulf states and Russia, which is currently engaged in a dangerous head-to-head with the West. As such, there is not much room for political maneuvering. Our needs dictate strong ties with all three major powers: the US, China, and Russia.
Making things more complex is the involvement of Iran, a rival we do not trust, in the game, in its dual capacity as an oil-exporting country and a commercial partner should its disagreement with the West come to an end. Major powers will need oil as a political tool, which could turn the Middle East region into a tug-of-war scene.
It's not right to compare the current developments to the Cold War (1947-1991). During the Cold War, we were aligned with the Western camp given our common interests: the West was the biggest oil importer and the protector of oil passages. Today, though China has taken the West’s place as the biggest importer, it is not willing to wage wars for oil, which increases the risks and possibilities of regional clashes. As such, the interest of this region lies in maintaining a reasonable relation with all three conflicting major powers, since they are all partners of ours. Nonetheless, when tensions are heightened as is the case in Ukraine today, achieving this aspiration could prove challenging for us.
We realize that our impact on global developments outside our region is limited. When considering our choices, the solution of taking sides could prove difficult, and in any case, discussing such an option now would be premature. We realize that major powers will eventually come to realize the limits of their power and the risks they are bringing upon themselves. We also realize that they will eventually understand that the continuation of the crisis is neither in their own interests nor in the interests of the world. We can only hope they will get to this realization before it is too late.
