New Coalition Could Signal The Beginning Of The End Of Us Power In The Middle East, According To KCS Group Europe
Leading intelligence provider KCS Group Europe (KCSGE) warns that recent talks between Iran and Saudi Arabia, brokered by China, will extend a North-South trading corridor, which could provoke the decline of US power in the Middle East, and dilute the place of the US dollar in the global financial system.
The rapprochement of the two states, previously mired in hostility, is potentially the start of a new coalition of partners, comprising China, Russia, Iran, India and Saudi Arabia.
KCSGE CEO Stuart Poole-Robb says: “A 4,500-mile trading corridor of ship, rail and road routes connects India through to Azerbaijan and onwards to Russia and Central Asia.
“Actions taken by the Biden administration and the conflict in Ukraine has pushed Saudi Arabia, in particular, away from the US. The Chinese-brokered peace between the Saudis and Iran signifies the beginning of the end of US influence.”
This geopolitical shift also contributes to the replacement of the dollar as the international trading currency. Saudi Arabia has concluded an agreement with China which will see it sell oil to China in yuan, becoming part of the BRICS trading system.
Meanwhile, Iran increased its exports of oil to China to 1.2 million barrels a day in February 2023, also being paid in yuan.
China, along with Russia, has expanded the SPFS banking transfer system as an alternative to the SWIFT banking transfer system, from which Russia was expelled. Offered to its BRICS allies, the system allows countries to de-couple from the US dollar for international transactions.
KCSGE has previously written about China’s advocacy of a more multipolar currency system through an expanded BRICS trading system and how it impacts on the EU and G7.
Moreover, Iran and Saudi Arabia have also applied for membership to the Chinese-Russian-led Shanghai Cooperation Organisation.
The move is in line with China’s ambition to expand its influence and economic ties with the Middle East.
Poole-Robb adds: “With Saudi Arabia and Iran being two major powers in the Middle East, any potential agreement between them will have significant implications for energy markets and regional security matters.
“There are potential benefits and risks of this trading accord and the impact it could have on the global economy.”
