Filthy rich country has Australia over a barrel

The European Union is extremely reliant on Russian gas. It’s now suffering for placing its faith in President Vladimir Putin’s “benevolent” dictatorship.

Australia is utterly dependent on Saudi Arabian oil. Now its price is being kept deliberately high thanks to the ambitions of its “pariah” Crown Prince Mohammed bin Salman (MbS).

OPEC Plus last week voted to cut oil production by two million barrels per day. That’s despite a global shortfall due to the ongoing invasion of Ukraine.

OPEC Plus’s most influential members are Russia – and Saudi Arabia. And their joint decision will drive oil and gas prices up globally, maximising profits as families struggle to stay warm in the northern winter as everyone grapples with soaring inflation.

It benefits Mr Putin. The 70-year-old is struggling to earn currency in the face of tough international sanctions. And he’s desperate to hurt the West.

It benefits the Crown Prince. The 37-year-old is striving to cement his grip on power. And make a name for himself as an international “strongman”.

Both believe their importance as global energy monopolies put them beyond all criticism and consequence. And while things really aren’t turning out that way for Mr Putin, Prince Mohammed appears to be doubling down in his support for his fellow autocrat.

US President Joe Biden was widely criticised for his “fist bump” attempt at oil diplomacy in July. As a presidential candidate, he vowed to make a “pariah” out of the tyrannical Prince. As President, he went to Riyadh cap-in-hand in return for a token effort to relieve high energy prices.

Now, this.

Crown Prince Mohammed has yanked the oil supply chain in the same way Mr Putin did with natural gas. And that marks a major shift in the global balance of energy power.

The Beijing, Moscow, Riyadh axis

They have a lot in common. They all have designs on neighbouring countries. They have global economic power. They tolerate no disagreement. And they’re led by men willing to do anything to stay in control.

Saudi Arabia has not condemned the invasion of Ukraine. Nor has it criticised Beijing’s repression of Sunni Muslims in Xinjiang. Meanwhile, Riyadh’s US-supplied air force continues to bomb civilian towns and facilities in devastated Yemen.

Instead, Prince Mohammed has moved to strengthen ties with his fellow autocrats while snubbing recent visits from the US, Britain and Germany.

Mr Putin has already rewarded him.

Russia has released a handful of international prisoners of war into the custody of Saudi diplomats, putting the Crown Prince under the global spotlight.

“This was a gift from Putin to MBS,” a British official said at the time. “Putin wanted it to happen, and he wanted it to seem as though the Saudis had achieved this through diplomacy.”

It’s a convergence of ‘like-minded’ powers. And it means the United States, the EU, and Australia can no longer rely on OPEC to save the day.

Iran came to the rescue during the 1973 “oil shock”. Saudi Arabia was the ally of choice after Iraq’s 1990 invasion of Kuwait.

But, in 2022, the oil powers are lining up behind Moscow.

“In a world where even China has concerns and questions about Russian policy, Saudi Arabia is today one of the only sure friends that Putin has left,” Bloomberg energy analyst Javier Blas writes. “It may be just pure business – an oil price that’s good for Moscow also suits Riyadh – but it increasingly looks like politics, too.”

Big oil’s last gasp?

“I thought the whole point of selling arms to the Gulf States despite their human rights abuses, nonsensical Yemen War, working against US interests in Libya, Sudan etc., was that when an international crisis came, the Gulf could choose America over Russia/China,” tweeted US Senate Foreign Relations Committee member Chris Murphy.

But the world isn’t what it was just a decade ago The power of oil and gas producers is peaking. Even in reluctant Australia, reliance on fossil fuels is diminishing rapidly.

Heavy users such as global mining corporations have begun to embrace electric trains, excavators, trucks and cars. Infrastructure projects, such as WA’s “EV Highway” are making electric vehicles more viable.

Diesel, petrol and natural gas remain the most energy-dense fuel source available. And that will keep them in use for decades to come.

But renewable electricity is rapidly becoming far more cost-effective. And that, more than climate fears, is driving global industry to embrace the change.

Meanwhile, Saudi Arabia is set to reap the benefits of high prices while it still can.

In the first quarter of this year alone, Saudi Aramco recorded an 82 per cent increase in profits. Its income went up from $US22 billion ($A34 billion) to $US40 billion ($A63 billion). And that’s set to soar further.

Is this “just business”? A move driven by the forces of supply and demand?

Or is it a blatantly anti-West move driven by collusion with Russia?

We know global oil demand has not collapsed. We know storage facilities are not at full capacity. And yet, OPEC has acted quicker than ever to slash its output.

Washington is not pleased.

“I want to be clear on this,” says director of the US National Economic Council Brian Deese, “The President has directed that we have all options on the table … so we aren’t in a situation where consumers are forced to bear the brunt of anticipated or unanticipated economic challenges.”

The ‘pariah’ Prince

Crown Pince Mohammed’s reputation is well established.

He was made Crown Prince in 2017 in what was regarded as a surprise move. Saudi tradition would have it that King Salman’s brother was next in line for the throne.

Instead, former crown prince Mohammed bin Nayef ended up under permanent house arrest.

Prince Mohammed immediately undertook a Chairman Xi-style ‘anti-corruption’ purge. Members of his own royal family were among those arrested and subject to asset seizure for ‘destabilising activities’.

Four years later, the King remains seriously ill. But not so ill that he cannot continue to grant more and power to his anointed successor. Prince Salman now controls the national guard, the police, the military – and the economy.

Last month he was formally made ‘Prime Minister’ – despite that role being reserved for the King himself under Saudi’ Basic Law’. The move, however, could make the Crown Prince immune to legal action in the US over the brutal murder of US-Saudi journalist Jamal Khashoggi in 2018.

US intelligence agencies have placed the blame squarely at Salman’s feet. The Crown Prince has paraded some human rights reforms in his Sunni Islam nation. Mostly, women are now permitted to drive.

But groups such as Human Rights Watch and Amnesty International continue to highlight his government’s poor record.

There is no freedom of speech. Nor is there a right to a fair trial.

In March, 81 people were executed in the space of one week. None had been given a trial.

The world barely paid any attention. Even as it maintained its rage at Russia’s atrocities in Ukraine and China’s repression of the Uighurs and Tibetans.

Last month, a video emerged of Saudi authorities brutally beating young women who had dared protest their treatment at a public orphanage. That came just weeks after two women were sentenced to 45 and 34 years respectively for daring to re-tweet views critical of the Saudi regime.

But Crown Prince Muhammed isn’t bothered.

When human rights were raised in a recent US diplomatic visit, his retort was: “Remember Abu Ghraib”.

Jamie Seidel is a freelance writer | @JamieSeidel