Members of the Saudi royal family appear to be preparing to go into exile as they are selling as much oil as possible in order to move their petrodollars out of the country. The declining oil price doesn’t matter. Clear signals are coming from the U.S. that the days of the incumbent clans are numbered.
In the first quarter of this year, oil exports from Saudi Arabia have increased by 3.5 percent compared to the same quarter of the previous year, reported by Fuelfix. Last year, around 61 percent of Saudi oil exports were shipped to Asia. So far this year 65 percent of all Saudi oil exports have gone to Asia. Of this, 14 percent alone was exported to China. In comparison between countries, the U.S. is the most important market for Saudi oil. In March, Saudi oil exports to the U.S. reached a daily volume of 1.28 million barrels per day, which is an eleven-month record high.
In December, Oilprice.com reported that Saudi Arabia, despite falling oil prices is increasing its oil exports. The country sells its oil now at nearly any price. At the same time, the country is resisting calls for a cut in its oil production. Instead, the Kingdom is calling for a reduction of Russia and Iran’s production, in order to achieve an oil price recovery.
Oil Producers Fail To Agree On Deal To Freeze Output After Saudi Arabia-Iran Standoff https://t.co/qVADotEVRx
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According to previous media reports, Riyadh wanted to harm, in particular Russia and Iran, with this policy, both of which are regarded as rivals in the Middle East. But the biggest objective damages suffered have been to the Kingdom itself. The foreign exchange reserves of the country have fallen dramatically amid the oil price decline. The state budget cannot be financed anymore in the usual way.
Therefore, this attitude cannot alone be explained with the fact that Saudi Arabia only wants to weaken Russia and Iran. The Kingdom has in the past few decades enamored its petrodollars primarily in U.S. bonds and U.S. assets. A significant portion of the funds apparently ended up in U.S. offshore centers such as Delaware, Wyoming, and Nevada. Furthermore, the Panama Papers confirm that the Saudi royal family parked such funds in tax havens.
Saudi Arabia Threatens To Sell $750B In U.S. Assets If Congress Exposes 9/11 Role, NYT Says https://t.co/y7qaAADHqn
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This whole process has accelerated since the conflicts in the Middle East and the unrest in their own country continue to grow. The Saudi royal family is fearing a coup, and is apparently preparing themselves for the period afterwards with a new home in exile.
Former Chief of Staff at the Pentagon, Lawrence Wilkerson, told the German Economic News:
“It has to be clear that the Arab Spring – I call it Arab Winter – is not over yet. The kings and emirs of Bahrain, Saudi Arabia, and Qatar and others are all scared. The world is changing, and these emirs and kings are on the wrong side of history. Their days are numbered.”
The Coming Collapse Of Saudi Arabia https://t.co/NF8OtRaY5T
— EMerging Equity (@EMequity) March 13, 2016
Saudi Arabia is directly involved in the conflicts in Yemen and Syria and these conflicts affect polarizing of the internal politics of the country. In addition to the Shiites, there are other groups in the country who do not agree with the foreign policy of the royal family.
But there are also critical people among the Saudi princes who advocate the overthrow of the Saudi monarchy, as The Guardian reports. According to these people, the Kingdom is no longer acceptable, because it has lost its legitimacy.
“Saudi Arabia is no state at all. There are two ways to describe it: as a political enterprise with a clever but ultimately unsustainable business model, or so corrupt as to resemble in its functioning a vertically and horizontally integrated criminal organization. Either way, it can’t last. It’s past time U.S.decision-makers began planning for the collapse of the Saudi kingdom.”
The air gets thinner for the Saudi royal family. The bigger the conflict situation becomes in the region, the more oil the country is selling to subsequently shift its profits outside of the country.
Obama’s Chilly Reception In Saudi Arabia Hints At Mutual Distrust https://t.co/54P6gCuGxi
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Even U.S. President Barack Obama is now calling for “democratic reforms” in Riyadh. He points for the need of these reforms to help prevent unrest in Saudi Arabia. The same rhetoric Obama used shortly before the outbreak of the Syrian conflict in 2011 to the government in Damascus. Afterwards the abroad financed Syria conflict erupted.
Source: Deutsche Wirtschafts Nachrichten (DWN)