By Eric Vandenbroeck
and co-workers
Saudi Arabia Is No Longer An Automatic
Partner
In October 2022, Saudi
Arabia announced that OPEC+, a group of oil-exporting countries, would cut oil
production targets substantially: by two million barrels per day. As the
world’s top oil exporter, the Saudis have always led the group’s efforts to
manage the world oil market. The move had an immediate, if relatively modest,
impact on oil prices, which rose from a low for the year of around $76 per
barrel before the announcement to a range of about $82 to $91 by mid-November.
The shock felt by Americans was more geopolitical than economic: the Biden
administration had asked Saudi Arabia to delay the cut. But Riyadh went ahead
with it anyway, snubbing Washington.
The resulting
recriminations between Washington and Riyadh have called into question the
future of the bilateral relationship. In response to the OPEC+ decision, the
Biden administration announced that it would reevaluate its relationship with
Saudi Arabia and said the cuts “would increase Russian revenues and blunt the
effectiveness of sanctions” introduced in response to
Russia’s invasion of Ukraine. Robert Menendez, a Democratic senator
from New Jersey, vowed to block arms sales to Saudi Arabia. Several members of
Congress introduced a bill mandating the removal of U.S. troops from the
kingdom. Riyadh refused to backtrack, saying the OPEC+ decision was unanimous
and based “purely on economic reasons.”
In the intervening
months, tempers on both sides have cooled. It seems unlikely that the Biden
administration’s promised reevaluation of ties with Saudi Arabia will
lead to a significant change. U.S.-Saudi relations have weathered worse crises.
And in November 2022, the Biden administration granted sovereign immunity to
Saudi Crown Prince Mohammed bin Salman, known as MBS, based on his role as
Saudi Arabia’s prime minister, in a U.S. civil case brought against him by the
fiancée of Jamal Khashoggi, a journalist murdered at the hands of Saudi
operatives. The immunity is one sign, among many others, that the U.S.-Saudi
relationship is not headed for rupture. But the OPEC+ imbroglio and its
aftermath signal the arrival of a new phase in the relationship. Riyadh is not
on board with Washington's grand strategy for the first time since the
mid-twentieth century, when the relationship began.
Analysts of
U.S.-Saudi affairs tend to focus on individuals and their agendas. MBS is
headstrong and authoritarian, seeking to remake Saudi Arabia’s economy and
elevate his country’s role as an independent global player. U.S.
President Joe Biden, by contrast, has a more cautious style and wants to
make democracy a centerpiece of his foreign policy, rallying the world against
Russia and China. This gap between the two men’s personalities and goals is
undoubtedly crucial in shaping their countries’ relations. But to paraphrase
Karl Marx in one of his more lucid moments, individuals make history, but not
necessarily in any way they choose. The OPEC+ controversy points to three critical
changes in the bilateral relationship that goes beyond personalities and will
have more lasting consequences than the actions and reactions of any
decision-makers.
First, the global
balance of power has shifted. Washington’s relative influence is waning as the
international order becomes multipolar, making moderately powerful countries
such as Saudi Arabia more likely to hedge their bets and less likely to throw
in their lot with just one great power. Second, as
climate change pushes the world away from fossil fuels, Saudi Arabia
is under pressure to cash in on its oil reserves while it still can—a sense of
urgency that is coloring its approach to production and pricing. Third, like
almost every issue of significance in American politics, the question of U.S.
relations with Saudi Arabia has become intensely polarized along partisan lines
in the United States, in no small part because the Saudis themselves have made
their preference for Republicans clear.
The great strategic
overlap that for decades defined the U.S.-Saudi relationship no longer exists.
But the prospects for cooperation on a relatively narrow set of regional and
economic issues remain good if both sides understand these shifts to reach a
more realistic set of mutual expectations.
Blowing Hot And Cold
Saudi Arabia became
essential to the United States after World War II, a conflict that highlighted
the central role that oil would play in modern military strategy and economic
development. Since then, the world has experienced three periods in the
distribution of global power. At first, during the Cold War, Saudi Arabia
had little choice but to support the United States’ geopolitical goals. After
all, it could not rely on the security and economic assistance from the Soviet
Union, which backed many of Riyadh’s regional rivals and espoused a
revolutionary communist ideology antithetical to the conservative Islamic basis
of Saudi rule. At the time, decisions about Saudi oil production remained in
the hands of the American oil companies that developed the Saudi oil industry
in the 1950s and 1960s. Riyadh did not have the power to deal with Moscow on
oil questions, even if it wanted to.
The United States and
Saudi Arabia were also odd ideological couples. Shared enemies and
complementary economic needs made them partners by default; common interests
were substituted for common values. The one exception to their alignment was
the Arab-Israeli conflict. Their divergence on that issue led to the biggest
crisis in the bilateral relationship’s history: the oil embargo of 1973–74,
when in response to U.S. support for Israel in the Yom Kippur War, Saudi
Arabia, and five other Arab countries briefly reduced the production of oil and
stopped shipping it to the United States. The disruption led to panic buying, a
quadrupling of oil prices, and a profound shift in power relations within the
oil market. Producer countries such as Saudi Arabia now called the shots; the
American companies that had run the Saudi oil industry became the junior
partners and service providers to the Saudi government.
Saudi policy directly
damaged the American economy, and Washington threatened military intervention.
The crisis was quickly averted after American diplomacy ended the war and led
to negotiations culminating in the Egyptian-Israeli peace treaty of 1979.
Washington and Riyadh’s common strategic goals in the Cold War, including
minimizing Soviet influence in the Middle East, helped to heal the breach
between the two capitals. In the years that followed, as oil became an ever
more salient issue for U.S. policymakers, maintaining good relations with the
Saudis became an increasingly crucial bipartisan goal. Cooperation grew during
the 1980s, as the two countries jointly aided the Afghans and foreign fighters
resisting the Soviet occupation of Afghanistan, and reached its peak during the
Gulf War of 1990–91, which coincided with the end of the Cold War and
demonstrated the utility of the bilateral relationship to both sides.
Oil tanks, Abqaiq, Saudi Arabia, October 2019
The second period was
that of U.S. unipolarity, which stretched from the collapse of the Soviet Union
to sometime in the 2010s. In this era, the United States was the only option
for countries such as Saudi Arabia that sought to partner with great power.
During this period, another great crisis occurred: the 9/11 attacks, which
Osama bin Laden planned, a scion of one of Saudi Arabia’s wealthiest families,
and perpetrated by 15 Saudis (out of a total of 19 hijackers). Since al Qaeda
targeted the Saudi ruling family and the United States, however, the two
countries once again found that a common enemy could bring them together.
During the subsequent “war on terror,” U.S. Presidents George W. Bush and
Barack Obama both nurtured close intelligence relations with Saudi Arabia.
Washington was the only game in town, and Riyadh backed U.S. initiatives even
when the kingdom publicly questioned their wisdom, most notably during the 2003
invasion of Iraq.
The end of the Cold
War and the dawn of Pax Americana were relatively sudden and involved a series of
dramatic events. The end of the unipolar moment, by contrast, took place
gradually. Yet by 2020, the squandering of U.S. assets and credibility in Iraq
and Afghanistan, the growth of dysfunction and polarization in American
domestic politics, the rise of China, and Russia’s attempted comeback as a
great power had all combined to create a new international balance of forces.
Unlike in the two previous periods, in the third, no common enemy cements
U.S.-Saudi relations. The Biden administration seeks to rally international
coalitions against Russia and China, but Saudi Arabia sees neither of those
great powers as enemies. China is now its largest oil customer and trade
partner. Trade between Saudi Arabia and China increased from less than $500
million in 1990 to $87 billion in 2021. That same year, the value of Saudi
exports to China, overwhelmingly oil and petroleum products, was more than
three times greater than Saudi exports to the United States and nearly doubled
those to India and Japan, the second and third largest Saudi export targets.
Russia is Saudi Arabia’s necessary (although occasionally difficult) partner in
managing the world oil market. OPEC+ countries produce roughly 40 million
barrels of oil daily; Saudi Arabia and Russia combined account for over half
that. Only if Moscow and Riyadh are on the same page can OPEC+ decisions impact
the market.
For all those
reasons, when Saudi leaders survey the geopolitical landscape, the picture they
see differs markedly from the one their American counterparts see. For
Washington elites that had become accustomed to almost guaranteed Saudi support
for the United States, this new reality is a shock, which is why some
politicians reacted hysterically to the OPEC+ decision. These reactions are not
merely about oil prices in the run-up to a midterm election. In the past, Saudi
Arabia and the United States have disagreed about oil prices. The difference
this time is the geopolitical context—especially the war in Ukraine, which the
Biden administration has defined as a historic inflection point that will
determine the future of world order. For Saudi Arabia, as for many other
countries, including India and Israel, it is simply a regional war.
Meanwhile, the Saudis
have their complaints. The past three U.S. presidents have campaigned on the
premise that the United States needs to spend less time and effort on the
Middle East. This is not comforting to a Saudi regime that sees Iran expanding
its influence in Iraq, Lebanon, Syria, and Yemen as a severe regional threat.
The United States focus on the Persian Gulf region for the past 70 years has
been to protect the free flow of oil. But when Iran launched a missile and
drone attack on Saudi oil facilities in September 2019—the most severe assault
on the free flow of oil since the Iraqi dictator Saddam Hussein set Kuwait’s
oil fields on fire in 1991—the Trump administration did nothing, despite the
close relations it had fostered with Riyadh.
The kingdom is no
longer an automatic partner of the United States. The cozy strategic
relationship of earlier eras isn’t coming back. But more limited cooperation
is possible, even if domestic politics on both sides present difficulties.
Like Oil And Water
Although Saudi Arabia
always prefers higher oil prices than U.S. presidents would like, the kingdom
used to occasionally accede to Washington’s requests to increase supply and get
more oil on the market, generally in the run-up to U.S. elections. But in
October 2022, Washington’s pleas went unheeded.
From Riyadh’s
perspective, the kingdom must exploit its last chance to cash in before the oil
era ends. That is the assumption behind the crown prince’s ambitious Vision
2030 economic restructuring plan—to create a more diversified Saudi economy
before the world market for oil craters under the pressure of climate change,
the move to alternative fuels, and other technological changes. That will not
happen for years. But the crown prince needs all the leverage he can get to
invest in non-oil sectors of the Saudi economy and to buffer his population
from the painful consequences of necessary reforms, such as the reduction of
substantial subsidies for public utilities, including water and electricity,
and the introduction of a 15 percent value-added tax on consumer purchases.
That explains why
Saudi oil policy aims to maintain prices at a level that can fund MBS’s
ambitious plans and still sustain steady global demand. Those imperatives will
not always match the United States’ electoral calendar. With less overlap
between Washington’s grand strategy and Riyadh’s foreign policy concerns, the
Saudi leadership is less likely than in the past to do U.S. presidents any
electoral favors when it comes to oil.
If the critical
changes affecting the bilateral relationship on the Saudi side are about
political economy, the domestic American changes are about partisan politics.
U.S.-Saudi ties, like so many other issues, have been drawn into the vortex of
the partisan polarization of U.S. politics. In the past, relations with Saudi
Arabia had little support among the general public, but whoever was in the
White House wanted good relations with the world’s largest oil exporter. That
began to change during the administration of U.S. President Donald Trump.
Trump made no secret
of his affection for the Saudis, particularly MBS. In an unprecedented step, he
made Riyadh the first foreign capital he visited. He bragged about and
exaggerated the arms sales he negotiated with the kingdom. In a risky move,
Trump publicly hinted at his support of MBS as the prince outmaneuvered his
cousin Mohammad bin Nayef, the main interlocutor of previous U.S.
administrations, and removed him from power in 2017. Historically, U.S.
presidents have not publicly involved themselves, even indirectly, in palace
politics. Trump equivocated about MBS’s complicity in the murder of Khashoggi,
even in the face of substantial evidence that the crime was carried out at the
crown prince’s direction. (“It could very well be that the crown prince knew
about this tragic event—maybe he did, and maybe he didn’t!” Trump said.)
Trump’s son-in-law and senior adviser, Jared Kushner, developed a direct
relationship with the crown prince outside usual diplomatic channels. After
leaving office, Kushner and Steven Mnuchin, who served as treasury secretary
under Trump, both received substantial investments from the Saudi sovereign
wealth fund for their private equity ventures. And this past November, Trump’s
company agreed to license the Trump name to a multibillion-dollar luxury
housing and golf complex developed in Oman by a significant Saudi real estate
firm.
To the Democratic
foreign policy establishment, it seemed as if the Saudis had chosen sides, and
its stance was tracked accordingly. The Khashoggi killing and Saudi involvement
in Yemen’s civil war came under steady Democratic criticism. During the
campaign for the Democratic presidential nomination in 2020, Biden called Saudi
Arabia, “a pariah.” This was shockingly harsh language from a former U.S. vice president
and senator who had dealt with the Saudis for decades and had always been a
reliable indicator of conventional wisdom on foreign policy within the
Democratic Party.
When the Biden
administration came into office, it put into practice the disdain for Saudi
Arabia the president had expressed during the campaign. Biden refused to speak
with the crown prince and authorized the release of a CIA report that held him
responsible for Khashoggi’s death. Washington limited its support for the Saudi
war effort in Yemen. It withdrew Patriot antiaircraft missiles from the
kingdom, even as Saudi Arabia faced missile attacks from the Houthis in Yemen.
The war in Ukraine
and the subsequent surge in oil prices caused the administration to reconsider.
Isolating the Saudis was feasible during the drop in world oil demand during
the COVID-19 pandemic. But when the United States tried to cut off Russian oil
exports as the world economy and oil demand began to recover, Washington needed
Saudi Arabia. Riyadh was one of the few actors that could pump more oil
immediately. Yet Biden’s trip to Saudi Arabia accomplished little and generated
even more bad feelings. The Saudis resented the U.S. contention that Biden had
come not to meet the crown prince but rather to attend a multilateral meeting
with the Gulf Cooperation Council states. The two sides debated publicly
whether Biden brought up the Khashoggi case during a private conversation with
MBS; Biden said he had, and the Saudis said he had not. A meeting meant to
smooth relations only ruffled them further.
Biden has handled the
relationship clumsily, but the Saudis are hardly without fault. The murder of
Khashoggi was, of course, an unforgivable crime. And the Saudis were far too
public in their embrace of Trump, from their lavish welcome at the outset of
his presidency to their participation in his and his family’s business ventures
since his 2020 defeat. In the end, Trump did not even act to defend the kingdom
when Iran attacked Saudi oil facilities in 2019. Even so, the Saudi leadership
seems to have concluded that it cannot get a fair hearing from Democrats and
can only hope that Republicans return to power. When the Saudis rebuffed the
Biden administration’s request to delay the OPEC+ production cut until after
the midterm elections, it strengthened the sense that Riyadh did not want to do
Democrats any favors. Only one party cannot sustain the United States’
relationships with foreign countries. Such partisan polarization poses the
greatest threat to the U.S.-Saudi relationship.
Mending Fences
For those who believe
that U.S. foreign policy should privilege human rights and shun fossil fuels,
the fraying U.S.-Saudi relationship poses no problem. But even the Biden administration,
which entered office happy to distance itself from Riyadh, quickly came to the
need for a working relationship with the world’s largest oil exporter. No
matter how committed the United States is to adopting clean energy, the oil
will be needed during the transition. No matter how badly Americans want to
pivot away from the Middle East, Washington has geopolitical commitments in the
region that draw the United States back in: keeping Iran from obtaining nuclear
weapons, preventing a resurgence of jihadism, maintaining regional stability to
reduce refugee pressures on Europe, and sustaining the relationship with
Israel. If oil and the Middle East remain marginally crucial for U.S.
interests, a working relationship with Saudi Arabia is necessary.
Step one in
sustaining such a relationship is recognizing how it has changed. The days when
Saudi Arabia would automatically side with the United States on grand strategic
issues are gone; for the Saudis, China and Russia now loom more significant
than ever. That does not mean that Riyadh will work against the United States
globally. It just means that the Saudis will consider issues case by case. That
will require the United States to take an open and consultative approach,
maintaining communication channels to convsignificante
the Saudis of common interests on global issues. Keeping Riyadh at arm’s length
is not the way to keep it on Washington’s side.
On the big issues in
the Middle East, Washington and Riyadh are close together. The traditional
stumbling block, the close U.S.-Israeli relationship, is no longer an obstacle,
thanks to warming Saudi-Israeli relations. The Saudis are increasingly willing
to work with Israel, even if they are not yet ready to follow Bahrain, Morocco,
Sudan, and the United Arab Emirates into the so-called Abraham Accords, through
which those countries have normalized their relations with Israel.
Another point of
tension with Riyadh that suddenly seems less salient is Washington’s effort to
curtail Iran’s nuclear activities through diplomacy, which the Saudis worried
would entail concessions to Iran that would solidify Tehran’s regional
influence. It seems likely that efforts to revive the Iran nuclear deal, which
Trump pulled out of in 2018, will fail. Washington will inevitably have to find
a new policy to deter or prevent Iran from obtaining nuclear weapons while
limiting or rolling back Iranian influence in the region. Saudi Arabia has the
same interest.
Although terrorism is
not at the top of the agenda today, the United States still has an interest in
preventing a resurgence of Salafi jihadism, extremism fueled by a revolutionary
and violent interpretation of Islam, as represented by al Qaeda, the Islamic
State (also known as ISIS), and other groups. Under MBS, Saudi Arabia has not
only opposed those groups in the region but has also reduced the influence of
the Salafi religious establishment in the kingdom. When Saudi Arabia encourages
a more tolerant and open interpretation of Islam, it undercuts the appeal of
Salafi jihadism.
Despite their
differences in oil prices, the two countries economic interests still overlap
in important ways. They share an interest in maintaining the dominance of the
U.S. dollar. Riyadh prices its oil in dollars, which buttresses the dollar’s
role as the world’s reserve currency because oil consumers must have dollars on
hand to fund their energy needs. Unfriendly oil producers such as Iran,
Venezuela, and Russia occasionally push to transact in alternative currencies.
Saudi Arabia has always resisted such overtures because anything that damages
the dollar’s centrality reduces the value of Saudi Arabia’s dollar-denominated
assets, which is significant given the volume of Saudi financial assets in U.S.
markets, including substantial holdings of U.S. government debt and investments
in U.S. companies.
Finally, it is in the
interest of both the United States and Saudi Arabia to continue to cooperate
on military and intelligence issues. For Saudi Arabia, neither China nor Russia
can provide the level of security cooperation that the United States can. Only
Washington can project substantial military power into the Persian Gulf region,
as demonstrated during the Gulf War of 1990–91. And the United States benefits
from cooperation, too. Saudi arms purchases reduce U.S. arms production unit
costs and link the two states’ militaries, fostering long-term partnerships.
With the likely failure of the nuclear talks with Tehran, the chance of a
confrontation between the United States and Iran grows. Cooperation with Saudi
Arabia on military contingencies increases the military efficiency of the
United States in the region, thereby deterring Iran.
The Arab Islamic American Summit, Riyadh, Saudi
Arabia, May 2017
Little can be done to
reverse the shift in the global balance of power or to ease the pressure Riyadh
feels to cash in on oil. But the United States and Saudi Arabia can bolster
bilateral ties if each side reconsiders how it views the other’s domestic
politics. The Saudis must jettison the self-defeating belief that one of the
United States political parties is against them and the other is for them.
Efforts to influence U.S. politics in favor of one party are bound to fail in
the long term since the out party eventually becomes the governing one in a
two-party system. Riyadh needs to make a major effort to convince Washington’s
Democratic establishment that it seeks good relations with the United States
and not just with Republicans. That means, as a beginning, resisting the siren
calls of the Trump world to assist in its 2024 restoration, either through
indirect financial support or policy moves aimed at weakening the Biden
administration. It also means that Saudi Arabia should make overtures to the
kingdom’s Democratic critics in Washington. Their minds might not be changed,
but their fears about Saudi interference in U.S. domestic politics could be
assuaged.
On the U.S. side,
Democrats should accept that MBS will likely be the next king of Saudi Arabia
and will rule for a long time. It makes no sense to try to isolate him or work
around him. This might be distasteful for advocates of human rights. Still,
suppose U.S. diplomats and officials can deal with Russian President Vladimir
Putin, Chinese President Xi Jinping, and the representatives of the Islamic
Republic of Iran and many other governments that violate the human rights of
their citizens and others. In that case, they can undoubtedly meet with MBS.
Indeed, in the new
global configuration, Washington will have to meet with Riyadh more often,
convincing the kingdom to see things its way. U.S. Secretary of State Antony
Blinken has visited Saudi Arabia only once during Biden’s July 2022 trip to the
kingdom. The Saudi-American Strategic Dialogue has not been held for two years.
Saudis notice these things.
The elements of
continued cooperation between the United States and Saudi Arabia are still in
place. But the two countries must set aside their unrealistic dreams of
changing or influencing the other’s domestic politics. Both sides must learn to
deal with the other side as it is—not as they wish it to be.
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