2012/01/16

China's Wen holds talks in oil-rich Saudi

RIYADH, January 15, 2012 (AFP) - Chinese Premier Wen Jiabao held talks with Saudi officials in Riyadh on the first stop of a Gulf tour, as tensions over Iran's nuclear programme spark fears of major oil supply disruptions, local media said.

The Chinese leader met late Saturday with Crown Prince Nayef bin Abdul Aziz, who is Saudi's interior minister, the official SPA news agency reported.

It added that the talks, also attended by Foreign Minister Prince Saud al-Faisal and Defence Minister Prince Salman bin Abdul Aziz, focused on "bilateral relations and regional and international affairs."

Saudi Arabia is the largest supplier of oil to energy-hungry China and bilateral trade between the two countries amounted to $58.5 billion in the first 11 months of 2011, according to Xinhua Chinese news agency.

On Sunday, Wen held talks with the head of the Organisation of Islamic Cooperation Ekmeleddin Ihsanoglu, an OIC statement said.
The Gulf tour will also take Wen to the United Arab Emirates and Qatar.

His trip comes as the West ups the stakes in its standoff with Iran, threatening to impose sanctions on the oil exports of the Islamic republic, which provides 11 percent of China's oil imports.

Iran is the third largest provider of oil to China. Qatar and the UAE, although both major oil-producing states, do not yet figure among the top 10 oil exporters to Beijing.

The visit comes days after Wen met with US Treasury Secretary Timothy Geithner, who was in Beijing to drum up support for the new US sanctions that aim to squeeze Iran's crucial oil revenues.

The measures bar any foreign banks that do business with Iran's central bank -- responsible for processing most oil purchases in the Islamic republic -- from US financial markets.

But China opposes the sanctions on Iran, which Washington and other nations accuse of developing nuclear weapons -- a claim denied by Tehran.

Japan's Foreign Minister Koichiro Gemba was in the Gulf last week also on a tour aimed to secure oil supplies in case of a shortage resulting from sanctions on Iran's oil exports.

Iran has starkly warned Gulf states not to make up for any shortfall in its oil exports under the new US and EU sanctions.

If Arab neighbours compensate for a looming EU ban on Iranian imports, "we would not consider these actions to be friendly," Iran's representative to OPEC, Mohammad Ali Khatibi, was quoted as saying by the Sharq newspaper on Sunday.