Do Saudis have a new best friend? Don't bet on it
Tensions are flaring between the U.S. and Saudi Arabia, prompting the oil-rich desert kingdom to forger closer economic and energy ties with another world power: China. But don't look for China to replace the U.S. as Saudi Arabia's closest ally any time soon.
This weekend's talks between Iran and Western powers over that country's nuclear ambitions ended with no deal in place, but that doesn't mean the Saudis weren't shocked and upset by the U.S. move to thaw long-frozen relations with Iran, Saudis Arabia's greatest regional and religious rival.
Saudi Arabia was already disappointed by the Obama administration's decision to side with Russia and opt against military strikes on Syria, effectively ending Saudi hopes that the U.S. would turn the tide against the Iran-allied government of Bashar Assad in Damascus.
"The Syrian issue was the straw that broke the camel's back. The kingdom is concerned that any victory for Assad would boost Iran's regional influence," Naser Al-Tamimi, author of "China-Saudi Arabia Relations, 1990-2012: Marriage of Convenience or Strategic Alliance?" explained to CNBC.
(Read more: Oil prices may be losing Iranian 'risk premium)
U.S. Secretary of State John Kerry visited Riyadh last week before traveling to talks on Iran, but in a veiled message, his Saudi counterpart conveyed that the U.S. needed to do more.
"A true relationship between friends is based on sincerity, candor and frankness, rather than mere courtesy," Foreign Minister Saud Al-Faisal said during a joint news conference.
The latest tensions between traditional allies the U.S. and Saudi Arabia come as the Saudi-China relationship has been growing rapidly in recent years.
In 2009, Saudi exports to China exceeded those to the U.S. for the first time. That comes as U.S. oil imports are expected to fall overall, thanks to its own domestic energy boom.
Chinese investments in Saudi Arabia are on the rise too: China has spent massively on oil refineries in Saudi Arabia and even signed a nuclear cooperation agreement with the desert kingdom.
However, a full swing by the OPEC's top exporter toward China is complicated by the fact that oil is still priced in U.S. dollars, and Saudi Arabia's currency is pegged to the greenback. The Saudis have also invested billions of dollars of oil revenue in U.S. Treasury bonds over the years.
Moreover, the Chinese didn't help their own cause with the Saudis when they blocked United Nations Security Council resolutions against Syria and Iran.
Perhaps most importantly, China can't provide the same security guarantees that the U.S. can. Saudi Arabia is unlikely to detach itself from its long-standing military and intelligence alliance with the Americans, said Thomas Lippman, author of "Saudi Arabia on the Edge: The Uncertain Future of an American Ally." Not only is China's appetite for such a role limited, but its military doesn't have the capacity to provide security for the region or patrol its shipping routes.
Al-Tamimi concurred: "Saudi Arabia and China recognize that, for at least the next decade, the United States will remain the only country in the world capable of projecting substantial amounts of conventional military and soft power into the Middle East."
What it means for oil
China became the world's biggest oil importer just this year, and already buys some crude from Iran and Russia using its own currency, the yuan. But even that is unlikely to be enough to tempt the Saudis away from the dollar and undermine the currency, if only because Saudi Arabia's so deeply invested in the greenback.
"Why would the Saudis damage the U.S. dollar by denominating oil sales in another currency? They have major holdings in the U.S. that could only be damaged by dumping the dollar," Neil Atkinson, head of analysis at Lloyd's List Intelligence, told CNBC.
(Read more: Risks remain due to sluggish recovery: OPEC)
Indeed, there is no significant indication of even a gradual reallocation of petrodollars right now, according to U.S. Treasury data.
And for now at least, U.S. imports of crude from Saudi Arabia are at their highest levels since the post-crisis slump in 2009, according to data from the Energy Information Administration.
—By CNBC's Yousef Gamal El-Din.