The decision by OPEC+ to cut oil production by 2 million barrels per day indicates that there might be strains in the US – Saudi relationship. The proposed cut would increase oil prices globally, distress consumers during the winter and propel the global economy towards a recession. Industrialized countries would face an economic slump but eventually weather the storm while developing countries will be hit the hardest.
Despite stiff American opposition and repeated requests by Washington that OPEC wait a month, OPEC, under alleged Saudi direction, went ahead with the decision. Biden vowed that there would be consequences and the White House issued a statement that the US needed to re-evaluate its relationship with Saudi Arabia.
The Saudi – American alliance goes back to Roosevelt meeting Ibn Saud on a ship in the Suez in 1945. Since then, this marriage of convenience has been the defining strategic fulcrum of the Middle East and has served both countries – the US obtained energy, ensured that Soviet influence in the Persian Gulf was checked and the Saudis acquired a benefactor willing to dole out generous military support.
Recent incidents betokened that not all was well; the death of the Saudi journalist Khashoggi sparked outrage, protesters were clamouring over cutting military sales for the Saudi campaign in Yemen and during his presidential campaign, Biden asserted he would treat Saudi Arabia like a pariah. The Saudis were perturbed by the US rapprochement with Iran.
American and Saudi interests converge when it comes to the Middle East’s stability.
Trump tearing up the JCPOA delighted them; Biden restarting negotiations with Tehran signalled the new administration had different priorities, even if both Israel and Saudi Arabia lobbied for a tough approach towards Tehran. However, shared economic interests in preventing an energy crisis – and intense lobbying, ensured a return to realpolitik. In July, Biden met Crown Prince Muhammad Bin Salman despite stiff opposition from progressives within his Party. Last week’s developments will inevitably attenuate the Saudi – American partnership.
Increasingly, the perception in Washington is that the Saudis have aligned their energy policy with Russia. In the 1980s, Riyadh flooded the market with oil, collapsing the Soviet economy. Today, the Saudis, whilst not snubbing Washington, have a closer relationship with Russia and have made it clear that they will chart their own policies vis-a-vis the Ukrainian conflict. The repercussions of this decision include the agitated and somewhat retributive statements emanating from the Democratic Party leadership. Senator Richard Blumenthal and Congressman Ro Khanna introduced legislation which would suspend military sales to Saudi Arabia. Senator Bob Menendez urged the Biden Administration to freeze cooperation with Saudi Arabia. Similar statements have been made by Congressmen Tom Malinowski and Sean Casten. Such furore has historically been reserved for developing countries, not the largest oil producer in the world. This indicates the Saudis no longer enjoy the same bipartisan influence they did among American legislators. The OPEC+ decision comes a fortnight before the US Midterm elections and might hinder the Democrat’s chances. It is no secret that the Saudis had a better relationship with Trump and still have a degree of support among the Republican Party. In the aftermath of the decision, the Democratic leadership appears determined to rethink America’s relationship with Saudi Arabia.
These rifts between the US and Saudi Arabia shouldn’t surprise anyone. Countries base their decisions on cold-hearted calculations of what national interests dictate, not on notions of friendship. Self-interests guide national policy, and the eternal interests of the Saudis dictate maximizing revenue from oil. Even if the Republicans come back to power in 2024, the days of an extremely close partnership are over and the chances of the US perpetually underwriting Saudi security are dim. Moreover, unlike in the 1990s, the US is self-sufficient in energy and the only reason for American military protection would be to ensure energy flow to Europe, stabilize international markets or prevent China from gaining a foothold in the Persian Gulf. In the short run, the Saudis can play the oil card, particularly as China seems like an alternate actor that would step in if the Americans withdraw. However, in long run, Saudi leverage is limited, particularly with the world shifting towards renewable energy and electric cars.
Still, American and Saudi interests converge when it comes to the Middle East’s stability. Both want to prevent any hindrance to global oil shipping and remain apprehensive of Iranian influence in the region. The Saudis seek investment in NEOM city and American defence firms would be loath to see large markets slip to the Chinese. The relationship will not completely break – there are far too many sunk costs and another US administration might give the Saudis a chance to reset ties in 2024. Moving forward, both countries will cooperate where their economic or security interests align but will diverge when their interests dictate a different path.
The writer is a freelancer.