The Big Picture

How Deep Are US-Saudi Strains?

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Hassan Ammar/AP

  • In the good old days of US-Saudi ties, the US security guarantee seemed to ensure that Saudi oil flows more or less matched US needs.

  • The reality was always more complicated than that, but right now so much divides the two sides that the relationship risks straining beyond repair.

  • That's reflected in Saudi Arabia’s repeated rebuffing of US requests to supply extra oil to the market, and talk that Riyadh is now looking past the Biden administration.

The US-Saudi relationship has shifted in fundamental ways over the last decade-and-a-half — not least because the US has become a major oil producer itself, undermining Opec's ability to manage the market and driving the formation of Opec-plus, with Russia. Three successive US presidents have also sought a lighter military footprint in the Middle East.

But right now Riyadh is also specifically frustrated with the administration of US President Joe Biden, including for withholding some arms sales to conduct operations in Yemen; criticism over its human rights record and the murder of Jamal Khashoggi; and the White House policy of keeping Biden from meeting directly with Crown Prince Mohammed bin Salman, the kingdom's de facto leader. Biden also entered office focused on an accelerated transition away from fossil fuels at home and globally, seen by producers as creating a hostile environment . His administration’s push for a nuclear deal with Iran compounds the tensions.

Some analysts claim the relationship between the Biden Administration and the kingdom would be very difficult to fix, even if the US doesn’t end up striking a deal with Iran. “The bottom line is that the Saudis are waiting for the next administration to repair ties" and are comfortable with this timeframe, said Theodore Karasik of Gulf State Analytics. "The current state of ties means that Saudi will not respond to the US.”

Riyadh was seen as more comfortable with former US President Donald Trump’s approach. A recent report in the New York Times that Saudi Arabia's Public Investment Fund invested $2 billion in an investment fund helmed by Jared Kushner, the son-in-law of former US President Donald Trump, suggests those ties remain warm.

Former Saudi Ambassador to the US Prince Turki bin Faisal publicly aired Saudi complaints this week, saying Riyadh feels “let down” by the Biden administration when it comes to regional security. The relationship was ebbing “particularly since the president of the US in his election campaign said that he will make Saudi Arabia a pariah, and of course he went on to practice what he preached,” Prince Turki said.

The dissatisfaction in Riyadh has given way to a cool reception to White House entreaties to increase oil output, including at a time when Russia’s war in Ukraine is adding a premium to already-high energy prices. High prices at the pump present an intense vulnerability for Biden.

Historically, Saudi Arabia and other Gulf producers were more responsive to US fears of higher oil prices and would at times signal to the market that more supply was on the way. Today, there’s concern that doing so could undermine the Opec-plus alliance with Russia, whose output has started to shrink under sanctions and other war-related pressures. Saudi Arabia sees Opec-plus as critical to the long-term market management needed to survive the energy transition — and continues to insist it doesn't see a need to pump more oil outside its Opec-plus pact.

Make Do and Mend?

The refrain from longtime oil market observers is that the Biden administration should repair the relationship. But it’s not clear what the Biden administration is willing to offer that would satisfy Riyadh at this point. The Biden administration’s focus on climate change isn’t likely to ebb. Nor is the White House likely to stay quiet on human rights issues.

There are signs Riyadh is trying to avoid a full diplomatic rupture,. After an article in the Wall Street Journal saying relations were at a "breaking point," a Saudi embassy statement said the relationship “remains strong,” citing daily contact between lower level officials as well as contacts at the highest levels of government.

“They’re looking to be brought back into the fold, they want to be treated as if they are a good actor,” says Kirsten Fontenrose, a former US National Security Council official. As much as Trump’s family-centered model of governing appealed to Riyadh, however, the relationship wasn’t perfect then either: The US declined to retaliate after the 2019 attack on Abqaiq, while Trump leveraged US military support to broker an end to Saudi Arabia’s early pandemic oil price war with Russia.

That experience, combined with a general feeling that US interest is waning in the region, has led Saudi Arabia, alongside the United Arab Emirates and Bahrain, to push for more robust defense commitments, says Fontenrose, structured in a way that can’t be ignored by Biden or a subsequent president. But a full-scale “attack on one is an attack on all” commitment is likely out of the question given the US’ obligations in Asia and Europe. Neither is it clear what structure could assuage Gulf concerns.

"What they do not want is clearer,” says Kristian Coates-Ulrichsen at Rice University: “Namely, a return to the [Iran nuclear deal] without a follow-on agreement that addresses issues of Saudi concern, such as Iran’s support for regional proxies.”

Old Bill, New Tricks

The high oil price is also seeing a resurgence in US political interest in market management — potentially injecting a new dynamic into the relationship. This week, the Senate Judiciary Committee advanced decades-old legislation known as “Nopec," a bill that would make it possible for the US government to sue foreign state-owned firms for holding back oil supply or setting prices.

Policy and Regulation, Opec/Opec-Plus
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