Why would the Saudis bail out Biden?

10 March 2022

4:47 AM

10 March 2022

4:47 AM

Is Saudi Arabia shunning Washington? Mohammed bin Salman has reportedly been refusing to phone Joe Biden, who wants the kingdom to turn on its oil taps as the West desperately seeks alternatives to the Russian energy market.

Riyadh – the world’s largest oil exporter – has so far failed to accommodate Washington’s pleas. Ahead of the Russian invasion in mid-February, the US asked the Opec+ cartel – of which Saudi Arabia is the most important member – to produce more oil to slow the already rising prices. Opec+ stood firm, and said they would increase production by 400,000 barrels a day in April, a rise agreed before the threat of a Russian invasion of Ukraine. The UAE told the FT it hopes to boost production, but the Saudis are yet to give the green light.

There are grievances. Joe Biden has – unlike Trump – refused to speak directly to the crown prince Mohammed bin Salman and hasn’t recognised him as Saudi Arabia’s de facto leader (that is, until he needed his oil). Biden’s administration believes that MBS was involved in the murder of the Washington Post journalist Jamal Khashoggi in 2018, so has been dealing with the elderly Saudi king instead.

In 2019, the then presidential nominee said he wanted to treat Saudi Arabia as a ‘pariah state’. That’s now looking like a dim move. Trump’s son-in-law Jared Kushner courted a close relationship with MBS, and the Trump administration largely looked the other way over Saudi Arabia’s war in Yemen. The result was a stable partnership with the world’s largest oil exporter. Biden, meanwhile, came to office promising to end ‘all American support for offensive operations in the war in Yemen’. In practice, this meant cutting off 75 per cent of Saudi Arabia’s weapons imports. The UAE and Saudi Arabia have come under missile fire from Iran-backed Yemeni Houthi rebels over the past few weeks, and have received no support from the US.

Meanwhile, American diplomats are still eager to resuscitate the nuclear deal with Iran. It’s worth remembering that Biden was in charge of foreign policy when he was Obama’s vice president. In the Middle East, he’s picking up where the Obama administration left off: forging a better friendship with Iran and ostracising Saudi Arabia. American diplomats have been in Vienna for months of talks about a new nuclear deal with the Iranians. If signed, Iran would be able to sell far more oil to the US, a blow for Saudi Arabia’s exports. The deal wouldn’t even destroy Iran’s ability to build nuclear weapons, as Riyadh hopes, since it would only be effective for 15 years and wouldn’t ban all Iranian nuclear capabilities.

A richer Iran can fund Saudi Arabia’s enemies across the Middle East: the Sunni Arab states – like Saudi Arabia, Bahrain and the UAE – know this and have formed an Arab-Israeli alliance against Iran in the past two years. Why would Mohammed bin Salman grant Biden’s requests for more oil if the US is about to breathe life into a rival oil exporter, and flood Saudi Arabia’s enemies with cash?

As well as a growing stand-off with the US, Saudi Arabia has economic reasons not to comply. If the US and Europe wean themselves off Russian oil without a backstop in place, Riyadh will be able to sell its oil at an incredibly high price. Why would they want to lower it? Soaring oil prices will give MBS’s grand reform plans – Vision 2030 – a financial boost. The crown jewel of his plans is Neom – the utopian new city by the Red Sea which will feature a 105-mile hyperloop called The Line – had been struggling to get off the ground, as Max Jeffery wrote for Coffee House last year. But the Saudi executives from the megaproject visiting New York next month might look like better friends – and a better investment – if Riyadh’s hose could rescue American consumers.

For now, Saudi Arabia seems to be helping Moscow, not Washington. By not producing more oil, the kingdom is making it harder for western nations to justify halting exports from Russia with speed. The Kremlin-Riyadh friendship is a brittle one: the two countries had an acrimonious and somewhat forgotten production war in March 2020 just as coronavirus hit. And why would Saudi Arabia look kindly on a Russian president who rescued Iran’s biggest puppet – Bashar al-Assad – during the Syrian civil war?

If the West bans imports from Russia without a back-up in place, Saudi Arabia could plug the gap. If Joe Biden continues to ostracise Saudi Arabia, Americans will feel the pain at the petrol pump. After several years of coldness from the West, Mohammed bin Salman might be about to get more recognition and more investment. He has Western power where he wants it.

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