Trade relations between the United States and Saudi Arabia recovered from the pandemic’s low levels in 2020, recording high exchanges of oil and non-oil goods in 2021.
A report issued by the Washington-based Saudi-US Business Council indicated that total trade volume reached $24.7 billion, a 22 percent increase over 2020 when trade amounted to $20.2 billion.
US exports to Saudi Arabia totaled $11.1 billion, up 0.3 percent from last year. However, exports of key defense-related segments declined while export of electronics, industrial goods, motor vehicles, and pharmaceuticals expanded.
Saudi non-oil exports to the US totaled $2.4 billion, increasing 71 percent from the previous year’s $1.4 billion, marking the highest annual non-oil exports from Saudi Arabia to the US on record.
Oil exports to the US rose 46 percent from $7.6 billion to $11.1 billion, according to the report exclusively obtained by Asharq Al-Awsat.
The report monitors the development of trade relations between the two countries and the expansion of non-oil exports.
The trade relationship between the two countries continues to evolve as Saudi non-oil exports grow beyond downstream petroleum industry products to metals and industrial manufacturers.
At the same time, the US remains the Kingdom’s second-largest source of goods across a highly diversified export profile.
The report indicates that Saudi oil exports to the US declined in 2021, but they rose steadily with the increase in demand due to the pandemic and increased consumption of the transportation and industry sectors.
Saudi non-oil exports to the US rose to $2.4 billion in 2021, marking the highest annual level of non-oil exports.
Fertilizers topped the Saudi non-oil exports to the US, reaching $688 million, while Saudi exports of urea fertilizer doubled during the past decade to $100 million.
Metals and mining exports from Saudi Arabia to the United States continued to grow in 2021, topped by aluminum and its products reaching $347 million, making it the third highest Saudi non-oil export to the US.
Other Saudi metals witnessed a 102 percent increase in export volume to the US, as Saudi Arabia is the fourth largest non-oil exporter to the United States.
According to the report, US exports to Saudi Arabia diversified across a range of electrical, mechanical, industrial, agricultural, and pharmaceutical industries.
Cars ranked the first for highest US exports to Saudi Arabia in 2021, with a total of $1.9 billion. Consumer cars comprised about 75 percent, while the remaining 25 percent included military vehicles, tractors, and trailers.
The second largest export category was boilers, machinery, spare parts, and others, constituting 12 percent of US goods exported to Saudi Arabia in 2021.
According to data recorded by the Saudi Ministry of Commerce, the volume of trade exchange between the Kingdom and the US in the past five years amounted to $166.1 billion, while the trade exchange between the two countries reached $36.5 billion in 2017, and $44.2 billion in 2018, $32 billion in 2019, and $22.9 billion in 2020.
Attractive Gulf market
Economist Jarmo Kotilaine said Saudi Arabia’s strategic importance is growing, especially among US companies and investors, because it has dynamic markets in the “heart of the old world” with easy access to the surrounding geographic areas.
Kotilaine told Asharq Al-Awsat that Saudi markets are characterized by a young, dynamic demographic and ambitious diversification agendas, noting that they all require increasing trade volumes and capital mobilization.
He explained that given its top-notch infrastructure and regulatory reforms, the Arabian Peninsula had become a true crossroads of the global economy and a hub for intercontinental flows of trade, travel, and capital.
The expert noted that the region is becoming an increasingly important target for US companies and investors looking for new opportunities in the Arabian Peninsula and beyond.
Kotilaine said that investments are also increasing in Saudi Arabia, noting that the Kingdom now houses an increasing number of companies with global prospects, where giant companies such as Aramco and SABIC have been creating a global presence for years.
Similarly, many Saudi investors are looking for strategic opportunities globally.
The Public Investment Fund (PIF) combines value investment and strategic location through acquiring assets that are not only logical from a financial perspective but can also contribute to diversifying the Saudi economy and progress towards more innovation, said Kotilaine.
A new chapter
Kotilaine stressed that Saudi-US trade is now poised for a new essential and significant stage in bilateral relations, noting that the most important opportunity is to shift the focus of the relationship more from the exchange of goods to investment and knowledge exchange.