Saudi Arabia joins Shanghai Co-operation Organisation

China and Saudi Arabia have strengthened energy ties in recent years

Riyadh, Saudi Arabia. The kingdom is joining the Shanghai Co-operation Organisation. EPA

Saudi Arabia has approved a decision to join the Shanghai Cooperation Organisation (SCO), a political and security union of countries spanning much of Eurasia, including China, India and Russia.

The decision by the cabinet follows years of close energy co-operation between the two countries, with China far overtaking the US as the main importer of Saudi Arabian oil, buying about 1.75 million barrels of oil per day last year.

Only Russia exports more oil to China, after heavily discounting its oil in the wake of the Ukraine conflict.

By contrast, US imports of Saudi Arabian oil dropped below 500,000 barrels per day last year. As recently as 2016, US oil imports from the kingdom frequently topped one million barrels per day.

China has also been investing heavily in Saudi Arabia's oil industry, with Saudi Aramco raising its multibillion-dollar investment in China on Tuesday, by finalising a planned joint venture in north-east China and acquiring a stake in a privately controlled petrochemical group.

The SCO was formed in 2001 by Russia, China, and former Soviet states in Central Asia, and has since expanded to include India and Pakistan. The organisation's goal is to promote regional stability and counter western influence in the region.

Iran signed documents for full membership in 2022, and Saudi Arabia has been granted the status of a dialogue partner, which is a first step towards full membership.

Joining the SCO is part of Saudi Arabia's efforts to build a long-term partnership with China, its largest trading partner. In recent years, the two countries have increased economic co-operation, with Saudi Arabia seeking to diversify its economy away from oil and gas by investing in Chinese technology and infrastructure projects.

In August this year, countries belonging to the SCO plan to hold a joint "counter-terrorism exercise" in Russia's Chelyabinsk region. The exercise is part of the organisation's efforts to promote regional security and co-operation.