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China and Middle East oil
The largest oil exporter in the Middle East has teamed up with the second largest consumer of oil in the world (China) to build a gigantic new oil refinery and the mainstream media in the United States has barely even noticed it. This mammoth new refinery is scheduled to be fully operational in the Red Sea port city of Yanbu by 2014. Over the past several years, China has sought to aggressively expand trade with Saudi Arabia, and China now actually imports more oil from Saudi Arabia than the United States does. In February, China imported1.39 million barrels of oil per day from Saudi Arabia. That was 39 percent higher than last February. So why is this important? Well, back in 1973 the United States and Saudi Arabia agreed that all oil sold by Saudi Arabia would be denominated in U.S. dollars. This petrodollar system was adopted by almost the entire world and it has had great benefits for the U.S. economy. But if China becomes Saudi Arabia’s most important trading partner, then why should Saudi Arabia continue to only sell oil in U.S. dollars? And if the petrodollar system collapses, what is that going to mean for the U.S. economy?
Those are very important questions, and they will be addressed later on in this article. First of all, let’s take a closer look at the agreement reached between Saudi Arabia and China recently....
The following is how the deal was described in a recent China Daily article ….
In what Riyadh calls “the largest expansion by any oil company in the world”, Sinopec’s deal on Saturday with Saudi oil giant Aramco will allow a major oil refinery to become operational in the Red Sea port of Yanbu by 2014.
The $8.5 billion joint venture, which covers an area of about 5.2 million square meters, is already under construction. It will process 400,000 barrels of heavy crude oil per day. Aramco will hold a 62.5 percent stake in the plant while Sinopec will own the remaining 37.5 percent.
At a time when the U.S. is actually losing refining capacity, this is a stunning development.
Yet the U.S. press has been largely silent about this.
If you are not familiar with the petrodollar system, it really is not that complicated. Basically, almost all of the oil in the world is traded in U.S. dollars. The origin of the petrodollar system was detailed in a recent article by Jerry Robinson….
In 1973, a deal was struck between Saudi Arabia and the United States in which every barrel of oil purchased from the Saudis would be denominated in U.S. dollars. Under this new arrangement, any country that sought to purchase oil from Saudi Arabia would be required to first exchange their own national currency for U.S. dollars. In exchange for Saudi Arabia’s willingness to denominate their oil sales exclusively in U.S. dollars, the United States offered weapons and protection of their oil fields from neighboring nations, including Israel.
By 1975, all of the OPEC nations had agreed to price their own oil supplies exclusively in U.S. dollars in exchange for weapons and military protection.
This petrodollar system, or more simply known as an “oil for dollars” system, created an immediate artificial demand for U.S. dollars around the globe. And of course, as global oil demand increased, so did the demand for U.S. dollars.
Once you understand the petrodollar system, it becomes much easier to understand why our politicians treat Saudi leaders with kid gloves. The U.S. government does not want to see anything happen that would jeopardize the status quo.
Internationally, Saudi Aramco holds substantial joint-venture and investment interests in refining and marketing activities in the United States, the Philippines, the Republic of Korea, Japan and China. Key market service support offices are located in major cities in North America, Europe and the Far East. Saudi Aramco, through its international shipping affiliate Vela International Marine Limited, also operates a sizeable fleet of supertankers for shipping crude oil and product vessels serving customer bases.
The Saudi Aramco story began in May 1933 with the signing of a concession agreement between the government of Saudi Arabia and Standard Oil Company of California (Socal), predecessor of Chevron. The agreement was signed in Jiddah by Shaikh Abdullah Al-Sulaiman, the Saudi Arabian Minister of Finance, and lawyer and land-lease expert Lloyd N. Hamilton, acting on behalf of Socal.
Socal passed this concession to a wholly owned subsidiary named the California-Arabian Standard Oil Co. (Casoc). In 1936, The Texas Company (later known as Texaco) purchased a 50- percent stake in the concession.
The company name was changed in 1944 to the Arabian American Oil Company (Aramco). In 1948, Socal and The Texas Company were joined as investors by Standard Oil of New Jersey (the predecessor of Exxon), which purchased 30 percent of the company, and Socony Vacuum (the predecessor of Mobil), which purchased 10 percent, leaving Socal and The Texas Company with equal 30 percent shares each.
Between 1973 and 1980, the Saudi Arabian government acquired an economic interest in Aramco’s operations in stages. In 1980, essentially all of Aramco’s assets were transferred to the government. From that time until 1988, Aramco operated the assets on behalf of and for the benefit of the government. In November 1988, the Saudi Arabian Oil Company was created by Royal Decree, and the company formally changed its name to Saudi Aramco.
The oil wealth generated in the Persian Gulf region is the main source of capital for these bankers. They sell the GCC sheiks 30-year treasury bonds at 5% interest, then loan the sheiks’ oil money out to Third World governments and Western consumers alike at 15-20% interest. In the process these financial overlords- who produce nothing of economic import- use debt as their lever in consolidating control over the global economy.
Oil and Drug Money Overlords
The international bankers oversee Persian Gulf oil wealth generated by their Big Oil tentacles. Chase Manhattan called the shots at Iran’s central Bank Markazi, then looted the Iranian Treasury as insiders Rockefeller, Kissinger and McCloy whisked their Shah puppet into exile. Chase had close ties to the Saudi SAMA central bank and Venezuela’s central bank, where Rockefeller-controlled Exxon Mobil “is the CIA”. Chase launched the Saudi Industrial Development Fund which doled out contracts to Chase-owned multinationals during the Saudi modernization drive, then bought Saudi Investment Banking Corporation, which did exactly the same.  World Bank Presidents Eugene Black and John McCloy both came from Chase.
Morgan Guaranty Trust presided over the House of Saud oil kitty. SAMA, created as the Kingdom’s Central Bank as the ink was still drying on the US/Saudi Security Agreement, was run by IMF goon Anwar Ali, who was handled by the “Three Wise Men” or “White Fathers”, the most powerful of which was John Meyer, chairman of Morgan Guaranty Trust’s International Division and later chairman of Morgan Guaranty. Meyer funneled SAMA petrodollar royalties into Morgan, which was investment counselor to SAMA.  Morgan was banker to Bechtel and ARAMCO. Stephen Bechtel sat on Morgan Guaranty’s board, as did Chevron Texaco CFR insider George Schultz and Sulaiman Olayan, the Bechtel straw man crucial to recycling Persian Gulf petrodollars into international banks.
Olayan owned half of Saudi Bechtel and big chunks of Chase Manhattan, Occidental Petroleum and CS First Boston, where he was director until 1995. Olayan founded Saudi-British Bank, a big player in the secretive Eurodollar market. He had a shady Caribbean partnership with Barclays and Jardine Matheson, which control Israeli finance and HSBC, respectively. He was board member at American Express alongside Henry Kissinger and Edmund Safra- whose crooked Republic Bank is part of the HSBC cesspool. Olayan Group’s bankers were CS First Boston, Saudi-British Bank, Saudi Hollandi Bank (subsidiary of ABN Amro- now Royal Bank of Scotland) and Chase.  Through these relationships Olayan was the glue that bonds the House of Saud to its Four Horsemen American, British and Dutch family owners.
In 1975 Morgan Guaranty took a 20% stake in Saudi International Bank in London, whose executive director was Morgan Guaranty Trust Director Peter de Roos. SAMA owned a 50% share, while Bank of Tokyo, Deutsche Bank, Banque de Nationale de Paris, National Westminster Bank and Union Bank of Switzerland each owned 5%.  Citibank bought 33% of Saudi American Bank. SAMA was advised by Merrill Lynch and Baring Brothers (now part of Royal Bank of Scotland), assuring both New York and London control over oil proceeds. The White Fathers firmly held the reins over House of Saud ARAMCO oil revenues.
Morgan Guaranty was investment adviser to the Abu Dhabi Investment Authority, central bank of the UAE, where monarch and primary BCCI shareholder Sheik Zayed held the purse strings. Morgan Grenfell, the London arm of the House of Morgan, advised the GCC government of Qatar and UAE gold market emirate Dubai. Grenfell- now part of Deutsche Bank- owned a large share of Jordan’s central bank and financed weapons sales to Oman, Jordan and Saudi Arabia. When Saudi Lockheed arms dealer Adnan Khasshoggi bought Arizona-Colorado Land & Cattle Company in 1974, US investment arm Morgan Stanley swung the deal. When Khasshoggi bought a 17,000 acre dairy farm and a million acre cattle ranch in Sudan, Morgan Stanley helped again.