Tag: Saudi Arabia
The stab in the back that isn’t
The Biden Administration is portraying Saudi support for the OPEC+ reduction in oil production quotas as as betraying the Saudi-American alliance The Kingdom’s move also appears to align Riyadh with Moscow against Kyiv.
It doesn’t add up
There is a lot wrong with this perspective:
- The Saudis have never been US allies, either de jure or de facto. The relationship inaugurated in 1945 with a meeting between President Roosevelt and Saudi King Abdul Aziz has always been transactional. The US supplied security in exchange for moderate oil prices and reliable supplies. The relationship was not based on shared values or even common security concerns.
- Circumstances have changed. The US was once a major oil importer. It is now a modest net oil exporter. American hydrocarbon companies benefit handsomely from higher oil prices. Saudi Arabia in the 1970s and 1980s had trouble spending all of its oil revenue. It now requires prices of about $100/barrel in order to balance its national budget. Maintaining an absolute monarchy ruling over a much larger population is expensive.
- Saudi Arabia no longer maintains as much excess production capacity as once it did. It is down to perhaps 2 million barrels per day above current production levels. That is small compared to its previous excess capacity of 4 million barrels per day or more. This is in part due to the privatization of part of Aramco. That required the company to behave more like a profit-seeking enterprise rather than a a state-subsidized one.
- Oil around $100/barrel is required for the transition away from hydrocarbons. The many alternatives to oil and natural gas are far more competitive if the price of oil is high. You won’t be hearing this from the Green New Deal folks, but they know their interest in moving the US away from climate-changing carbon dioxide requires higher oil prices, not lower ones.
National interests prevail
What we are seeing is not a stab in the back, but a convergence of Saudi, Russian, and Iranian interests in higher oil prices. Riyadh, Moscow, and Tehran are all frightened that the impending slow-down in the world economy will lead to dramatic cuts in oil prices. Reducing production first serves their national interests.
The Americans are seeing all issues through Ukraine-tinted glasses. But others do not. Riyadh has made it clear it does not regard the Ukraine war as one in which it has a vital interest. This is not surprising. Even if the Kingdom did regard Ukraine as vital, why would an absolute monarchy with no regard for human rights favor Zelensky over Putin?
What is to be done?
The question is how the US should react. Proposals so far include continuing drawdown of the Strategic Petroleum Reserve (SPR), allowing lawsuits against OPEC for price-fixing and cutting arms sales to Saudi Arabia.
Continuing drawdown of the SPR makes obvious sense. Its one million barrels per day have moderated oil prices since the Russian invasion of Ukraine. The drawdown also returns substantial profits to the US Treasury (average acquisition price was about $30/barrel).
Cutting arms sales to the Kingdom doesn’t pass muster as a good idea. Riyadh will turn to others–read Russia or China or both–less fastidious about the conditions imposed. The Saudis like high tech American weapons. But they don’t really need them compete militarily with Iran, their only serious potential adversary in the region.
“NOPEC” legislation pending in Congress would allow lawsuits in the US against OPEC and OPEC+ for anti-competitive behavior. It is not clear that such lawsuits would be successful, or that they would lead to successful remedies. Nor would it likely improve relations with the Saudis. But at least this approach is consistent with US policy on monopolies and does not empower US adversaries.
Another approach, one politically less palatable, is to wait and see. If OPEC+ manages to maintain high oil prices, that will presumably incentivize alternatives worldwide. It won’t help the Democrats in the November election, but at least it is something the Biden Administration supports. If the world economy slows dramatically and prices either remain at current levels or fall, Biden will also have the last laugh.
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Stevenson’s army, October 11
– NYT says Biden is angry at Saudi Arabia.
– WSJ says Saudis “defied US warnings” about oil production cuts.
– RAND analyst says Putin’s successor likely to continue Ukraine war.
– Carl Bildt has suggestions for countering nuclear threat.
– Eliot Cohen assesses the next phase of the war.
– NYT warns of wider war between Tigray and Ethiopia.
– Lawfare analyzes little known authorization for counter-terror funding.
– WaPo has parade of horribles if Trump is reelected.
My SAIS colleague Charlie Stevenson distributes this almost daily news digest of foreign/defense/national security policy to “Stevenson’s army” via Googlegroups. I republish here, with occasional videos of my choice. To get Stevenson’s army by email, send a blank email (no subject or text in the body) to stevensons-army+subscribe@googlegroups.com. You’ll get an email confirming your join request. Click “Join This Group” and follow the instructions to join. Once you have joined, you can adjust your email delivery preferences (if you want every email or a digest of the emails).
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Stevenson’s army, September 8
– NYT notes shock waves to global economy.
– A former student who is a China watcher recommends this article on Xi Jinping by a longtime professor at the CCP’s party school.
– NYT notes widely disparate punishments for the few cases of voter fraud.
– Journalist Josh Barro has an interesting explanation for why Biden’s low approval ratings don’t seem to hurt Democrats much.
– SecState Blinken in Kyiv announces more military aid.
– DOD wants military testing facility in Saudi Arabia.
– AP says Retired LTG Flynn is building a political movement.
My SAIS colleague Charlie Stevenson distributes this almost daily news digest of foreign/defense/national security policy to “Stevenson’s army” via Googlegroups. I republish here. To get Stevenson’s army by email, send a blank email (no subject or text in the body) to stevensons-army+subscribe@googlegroups.com. You’ll get an email confirming your join request. Click “Join This Group” and follow the instructions to join. Once you have joined, you can adjust your email delivery preferences (if you want every email or a digest of the emails).
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Stevenson’s army, July 26
– Russia has significantly cut natural gas supplies to Europe. Carnegie has good background.
– CNN says Huawei equipment could endanger US nuclear forces.
-Techie explains why Russia hasn’t jammed GPS more.
– Politico tells how Saudis manipulate the US press
– NYT details Chinese strategy in Africa.
– NYT carries clear signal administration doesn’t want Pelosi to go to Taiwan now.
– Lawyers answer complaints about Electoral Count Act.
– The Hill sees a “GOP civil war” over Ukraine.
– Organizational culture differences are even causing problems at a major military hospital.
– Jake Sullivan gives long interview.
My SAIS colleague Charlie Stevenson distributes this almost daily news digest of foreign/defense/national security policy to “Stevenson’s army” via Googlegroups. I republish here. To get Stevenson’s army by email, send a blank email (no subject or text in the body) to stevensons-army+subscribe@googlegroups.com. You’ll get an email confirming your join request. Click “Join This Group” and follow the instructions to join. Once you have joined, you can adjust your email delivery preferences (if you want every email or a digest of the emails).
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Goodies but mostly oldies
President Biden’s first trip to the Middle East took him to Israel and the occupied territories of the West Bank and East Jerusalem as well as Jeddah and Riyadh. So what difference will this much-anticipated trip make?
Israeli security first
In Jerusalem, Biden reaffirmed, for the umpteenth time, US commitment to Israeli security. He promised, again for the umpteenth time, that the US would use all necessary elements of national power to prevent Iran from obtaining nuclear weapons. He also reiterated support for the Abrahamic accords and for an (eventual) two-state solution for the Israel/Palestine conflict. The Israelis did not join that commitment. Both Lapid and Biden favored improvement of the Palestinian economy and quality of life. They opposed anti-Semitism and BDS (the peaceful boycott, divest, sanctions movement against Israel’s occupation of Palestinian territory).
The only novelty was a new dialogue on technology. That is a natural extension of the decades-long, fruitful cooperation on air defense. Also new to me was reference to India/Israel/UAE/US (I2U2) cooperation of a vague sort.
Notably missing was any reference to Israeli repression in the occupied territories. Biden ignored the killing in May by Israeli security forces of Palestinian American journalist Shireen Abu Akleh.
Palestine not even a close second
President Biden’s visit to Palestinian Authority President Mahmoud Abbas in Bethlehem was low key. Biden made it clear the two-state solution is not for now. But he announced hundreds of millions in assistance to hospitals in the occupied territories (without of course calling them that).
The only novelty was a visit, without an Israeli escort, to a Palestinian hospital in East Jerusalem. The Palestinians hope it will some day house the capital of their state. But that sop did not do anything to reduce Palestinian disillusion with American policy. The Americans support the Palestinian Authority’s repressive security apparatus but fail to press Israel for meaningful concessions on Jewish settlements in the West Bank
Riyadh reconnected
Biden’s objective in Saudi Arabia was to get past a years-long rough patch in US/Saudi relations. Despite Trump’s sword-dancing with the Saudis at the beginning of his term, his Administration was a disappointment to the Saudis. They thought it did not do enough to respond to Houthi attacks on the Kingdom’s oil infrastructure. Biden as a candidate labelled Saudi Arabia a pariah, because of the murder of Washington Post journalist and Saudi citizen Jamal Khashoggi in the Kingdom’s consulate in Istanbul. But oil prices are peaking as a result of the Ukraine war and Israel is anxious to extend the normalization process to Saudi Arabia. Washington decided continuing friction was not advisable.
So with a fist bump and a private complaint to Mohammed bin Salman about the murder, Biden sought to reset relations. Their immediate reciprocal gesture was minimal. The Saudis will allow Israeli civilian aircraft to fly over the Kingdom, as Biden’s did from Tel Aviv. There was no public commitment on oil production. The Saudi Foreign Minister made it clear the opening of airspace was not a gesture only to Israel and that the Saudis will continue to insist on a peace settlement with the Palestinians before diplomatic recognition of Israel. Riyadh and Washington agreed however on a long agenda for US/Saudi cooperation.
Normalization is a process. It appears to be proceeding in internal security and air defense, even if the Israelis exaggerate that cooperation in public. Three years ago I was sitting in the business class lounge in Riyadh hearing nothing but Hebrew around me, spoken by mostly men carrying the kind of cases that contain electronic equipment. When I asked why the somewhat cold-eyed response was clear enough: if I told you, I’d have to kill you.
Notable, but little noted
Notable, but not much noted, is that the US will withdraw its multinational observer force from the strategically important island of Tiran. It sits just outside the Bab al Mandeb at the entrance to the Red Sea. Egypt has agreed to transfer sovereignty over Tiran and another small island to the Kingdom. US withdrawal wouldn’t be happening without Israeli concurrence, as the observers were put there in fulfillment of the 1979 Egypt/Israel peace treaty.
Horror vacui
Biden met in Jeddah Saturday with leaders of the six GCC states (Saudi Arabia, UAE, Oman, Qatar, Bahrain, and Kuwait) as well as Egypt, Iraq, and Jordan. This was a first for an American president. He also held bilateral meetings with Egyptian President Sisi, Iraqi Prime Minister Kadhimi, and United Arab Emirates President Sheikh Zayed. The Americans were keen to underline that they do not want to leave a vacuum in the Middle East that China and Russia can occupy.
Even if they don’t, Moscow and Beijing will be more present in the region than in recent decades. Russia is OPEC’s partner in maintaining oil prices, a protector of the Syrian regime, and increasingly an arms supplier in the region. Moscow is seeking drones from Iran to use in Ukraine. Beijing is the major consumer of regional oil and gas and supplier of manufactured goods.
Bottom lines
Only time will tell how the geopolitical rivalry in the Middle East will work out. So far, the perception of reduced American commitment has led to a process of rapprochement in several directions. Saudi Arabia has been busy improving relations not only with Russia and China but also with Turkey, Qatar, and Iran. Normalization with Israel may not be in the cards anytime soon, but Israel’s technology is welcome because it comes with few strings attached. The Americans are not going to find it easy to press the case for democracy, which Biden vowed to do, while their proxy befriends the autocrats.
Here is the event on the trip I did with Gulf International Forum and a great lineup of speakers on Monday, after the trip:
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Stevenson’s army, July 11
So I’m back home for a few days and have scanned the papers. What’s still significant?
-President Biden put his Mideast policy into a WaPo op-ed just before his Wednesday trip to the region.
– Reuters says US likely to resume arms sales to Saudis.
– Heads of MI5 and FBI put out joint statement on threats from Chinese Communist Party
– NYT says US will tighten export controls as part of plan to counter Chinese tech.
– Defense News says NATO will do country-pairings to strengthen eastern flank.
-Politico has good background article on CODELS.
– Hill staff survey finds hopeful signs.
– Report notes that Hill office budgets can be spent on non-election TV ads.
– Hill article summarizes research on sources of political outrage.
– And Dana Milbank says Gingrich and McConnell deserve significant blame for fueling distrust in government.
My SAIS colleague Charlie Stevenson distributes this almost daily news digest of foreign/defense/national security policy to “Stevenson’s army” via Googlegroups. I republish here. To get Stevenson’s army by email, send a blank email (no subject or text in the body) to stevensons-army+subscribe@googlegroups.com. You’ll get an email confirming your join request. Click “Join This Group” and follow the instructions to join. Once you have joined, you can adjust your email delivery preferences (if you want every email or a digest of the emails).
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