Since the late 1990s, we have witnessed the rapid growth of Asia Pacific countries, with China taking the lead. Until 2005, the U.S. had hardly any idea to what extent this rise would progress or where it would stop. More precisely, it thought that China would continue to passively finance the U.S.'s external debts. The U.S. was awakened to the reality when China National Offshore Oil Corporation (CNOOC) proposed a bid to purchase American oil company, Union Oil Company of California (UNOCAL), in 2005. The House of Representatives issued a decision on June 30, 2005, stating that letting CNOOC purchase UNOCAL would threaten the national security of the U.S.
On June 27, 2005, The New York Times' Paul Krugman wrote, "Unocal sounds, in other words, like exactly the kind of company the Chinese government might want to control if it envisions a sort of ‘great game' in which major economic powers scramble for access to far-flung oil and natural gas reserves. (Buying a company is a lot cheaper, in lives and money, than invading an oil-producing country.) So the Unocal story gains extra resonance from the latest surge in oil prices."If it were up to me, I'd block the Chinese bid for Unocal. But it would be a lot easier to take that position if the United States weren't so dependent on China right now, not just to buy our I.O.U.'s, but to help us deal with North Korea now that our military is bogged down in Iraq."
It seems that the U.S. depends on Saudi Arabia, like China, to finance itself. However, Saudi Arabia will not be able to survive for a long time if it prefers to maintain the U.S.'s dollar-based monetary system that upholds economic sovereignty and produces crises. Indeed, this system does not offer a remedy for Saudi Arabia apart from investing its oil revenues in dollar-based assets and relinquishing petro-dollar system to American banks.
Krugman also says that China is not like Japan and poses a danger for the U.S., as it manages its resources in line with a strategic expansion strategy instead of squandering them. Certainly, Saudi Arabia will no longer waste its resources in the dollar-based system - which marks the beginning of a new state of balance and monetary system.
For the past 15 years, the U.S.'s real nightmare has been the possibility that China might exit the dollar-based trade cycle. The U.S. has not yet eluded this dangerous possibility, which is getting even more complicated. Moreover, Saudi Arabia is becoming a part of this danger as it indicates that it will not maintain the petro-dollar system that was established after the 1973 oil crisis. This system is based on an agreement that the U.S. signed with the Saudi monarch in 1975 and which includes the Organization of Petroleum Exporting Countries (OPEC). Accordingly, OPEC members would sell oil only on a dollar basis and these petro-dollars would be diversified through the U.S. banking system in financial markets. After a while, the Saudi currency was fixed on the dollar. This agreement was not only an energy game, but also a form of capital accumulation and hegemony. Petro-dollars were spent on armament and the illegal financing of politics in the Middle East and developing countries. In other words, the budgets and bribes which were called "aid" and which were allocated to the bureaucracy in these countries to sustain coups and dictatorial regimes through armament were the ordinary trade dynamics of the petro-dollar system. Throughout this process, coups and coalition governments, which could not survive more than two years, moved Turkey's parliamentary system away from a structure that reflected national will. This petro-dollar system, which also led to a balance of terror, underlay the West's support for military coups and oligarchic dictatorships in Turkey and many other developing countries.
We nowadays see that this balance of terror and petro-dollar sovereignty are coming to an end. The political staff that came to power in Saudi Arabia with King Salman have realized that the system would end one day as Saudi Arabia would not forever exist as the petro-dollar provider for the U.S.'s dollar-based economy and embarked on a quest for a new solution. Saudi authorities are aware that they will never be able to evaluate their resources and assets if they cannot do so in the current state of oil prices. If Saudi Arabia's state-run oil giant Aramco, which has 10 times more hydrocarbon reserves than American ExxonMobil, goes public today, not only will a new era start in Saudi Arabia, but also the petro-dollar part of the dollar-based Bretton-Woods system will collapse. This is because even if a small part of Aramco is opened to the public as a company which is $2 trillion in size, Saudi Arabia will have an open economy and start discussing the riyal's fixation on the dollar. Due to the value loss in oil, Saudi Arabia has depleted nearly $100 billion in its reserves. It can compensate for this loss by opening 5 percent of Aramco to the public. Moreover, Saudi Arabia can also get rid of the U.S.'s dollar-based cycle and change the paths of many countries, including Russia, by keeping the oil supply at current levels. The U.S. will not be able to overcome the combination of changes that Saudi Arabia and Asia Pacific are undergoing. We see that the current world and its power balances are rapidly changing. In this respect, democratic countries like Turkey, which can smoothly undertake this rapid change, are crucial for both Europe and the U.S. in this period. Therefore, Turkey's stability is more important than ever for the U.S.