June 15, 2022
IntelBrief: U.S.-Saudi Relations Reset
Over the past month and a half, exchanges of high-level visits between the United States and Saudi Arabia had been laying the groundwork for a recently announced trip by President Biden to Riyadh. During the visit, President Biden will meet with King Salman and the controversial Crown Prince and de-facto leader Mohammad bin Salman (MBS). The July 15 visit will follow a stop in Israel, which is not only a key U.S. partner, but has also been expanding ties to Saudi Arabia and other Gulf states. During the visit, President Biden will also meet with leaders of the Gulf Cooperation Council (GCC). The early summer exchanges included a visit in May by the Saudi deputy defense minister, MBS’ younger brother, as well as visits in June by the Saudi ministers of commerce and of investment. A White House delegation went to the Kingdom in late May to discuss the planned presidential trip, as well as a range of issues including the global energy market, Iran, and the conflict in Yemen.
Shifts in global and regional geopolitics encouraged a U.S. reset of relations with MBS. In large part because of MBS’ role in the October 2018 killing of Saudi dissident journalist Jamal Khashoggi at the Saudi consulate in Istanbul, President Biden has sought to avoid dealing with MBS directly, instead choosing to engage with King Salman. But marginalizing MBS has become untenable as world oil prices have spiked as a result of U.S. and European sanctions against Russia for its illegal invasion of Ukraine. Due to his declining health, most international leaders meet with King Salman as a formality but conduct substantive diplomacy with MBS. The Crown Prince is clearly the de-facto leader of the Kingdom and the main decision-maker on Saudi energy export strategy. The shift toward direct engagement with MBS has been facilitated by his support for a ceasefire in Yemen, which has been extended for an additional two-month period to early August as the Saudi Crown Prince potentially seeks an exit ramp from the conflict. MBS and his close ally, UAE leader Mohammad bin Zayid al-Nahyan (MBZ), entered the Yemen conflict in 2015 to counter Houthi rebels backed by Iran, but the war caused a humanitarian catastrophe in Yemen and had begun to turn U.S. opinion against MBS well before the Khashoggi killing. Still, because MBS has not been held accountable for that killing or other transgressions, there is still substantial opposition to rehabilitating MBS within U.S. policy circles and key U.S. constituencies. Although clearly reluctant to do so, President Biden’s decision to travel to Riyadh in order to visit the royal court shows how reliant the U.S. is on Saudi Arabia as a regional partner and source of energy stability.
Despite the vast ideological rift between the two leaders and their governments, it is clear that U.S. officials view the Kingdom - and MBS as its de-facto leader - as key to their efforts to reduce world oil prices - considered a main contributor to a 40-year high in U.S. inflation. Saudi Arabia has typically maintained nearly 2 million barrels per day of spare oil production capacity, although its current spare capacity is believed to be closer to 1 million barrels per day. Still, Saudi spare capacity, as well as that of the UAE, could be put on the market quickly and could almost immediately reduce world oil prices from their current $120 per barrel valuation. Reducing prices would also serve Saudi interests: Saudi policy has historically sought to keep prices from escalating too far too fast - a result that would spur cuts in Western consumption and increase investment in alternative energies. Encouraging more domestic U.S. oil production represents an alternative U.S. strategy - but one which will not likely have immediate effect because of the lead times required for more U.S. oil to be produced. Yet, some argue that the United States should not engage dictatorial and abusive oil exporting regimes such as those in Saudi Arabia, Iran, and Venezuela to address the problem of high world oil prices.
The U.S. decision to engage with MBS also reflects, in part, the still solid fundamental pillars of U.S.-Saudi relations. The Kingdom remains under a U.S. security umbrella, and U.S. arms sales and military deployments to the Kingdom have been largely unaffected by the frosty relations between the two governments. The Kingdom continues to look to the United States to deploy technology to intercept Iranian missile attacks - either launched from Iran itself or by any of Tehran’s proxies. Neither MBS nor any other Gulf leader expects that the one-year long Saudi dialogue with Tehran will produce any significant breakthroughs that reduce the threat to the Gulf posed by Iran. And, the poor performance of Russian forces in Ukraine has demonstrated to MBS and other Saudi leaders that Russia is not an alternative to the United States as the Kingdom’s primary security partner. If President Biden proceeds with the visit, it is likely that the discussions in Riyadh will focus on the mutual interests that have enabled U.S.-Saudi relations to weather previous disputes -rather than on the mistakes and transgressions MBS has committed that have caused significant tensions in the relationship. The reversal will come at a reputational and moral cost for the Biden administration, especially in light of the recent decision to disinvite autocratic leaders from last week’s Summit of the Americas. Realpolitik appears to have prevailed again.