• by:
  • 2022-10-24
  • Source: The American Dossier
  • 10/24/2022

An unwritten pact binding the U.S. and Saudi Arabia has survived 15 presidents and seven kings through an Arab oil embargo, two Persian Gulf wars and the Sept. 11 terrorist attacks. Now, it is fracturing under two leaders who don’t like or trust each other.

Saudi Crown Prince Mohammed bin Salman, the kingdom’s 37-year-old day-to-day ruler, mocks President Biden in private, making fun of the 79-year-old’s gaffes and questioning his mental acuity, according to people inside the Saudi government. He has told advisers he hasn’t been impressed with Mr. Biden since his days as vice president, and much preferred former President Donald Trump, the people said.

Mr. Biden said on the campaign trail in 2020 that he saw “very little social redeeming value in the present government in Saudi Arabia.” He refused to talk to Prince Mohammed for over a year, and when they finally did meet in Jeddah in July, Saudi officials present felt that Mr. Biden didn’t want to be there, and was uninterested in the policy discussions, the people said. U.S. officials said Mr. Biden devoted significant time and energy in the meetings.

Geopolitical and economic forces have been driving wedges into the relationship between America and Saudi Arabia for years. But the enmity between Mr. Biden and Prince Mohammed has deepened the tension, and it is likely to get only messier.

“Rarely has the chain of broken expectations and perceived insults and humiliations been greater than they are now,” said Aaron David Miller, a veteran U.S. diplomat in the Middle East now at the Carnegie Endowment for International Peace. “There’s almost no trust and absolutely no mutual respect.”

The decision by Saudi-led OPEC+ to cut oil production—raising crude prices at a time of high inflation just before an American election and despite U.S. pleas to hold off—has cemented both leaders’ resolve to reconsider a strategic relationship that has underpinned the global economy and Middle East geopolitics for almost 80 years, with once-unthinkable retaliatory measures now on the table. The White House has said Mr. Biden wants to review whether the Saudi relationship is serving U.S. national security interests, on top of an administration reassessment last year. Saudi officials say it may now be time for them to reassess the U.S. relationship, too.

The Russian invasion of Ukraine and the West’s response have exacerbated tensions, since the production cut propped up oil prices that help fund President Vladimir Putin’s war effort and undermined U.S.-led sanctions on Moscow.

In the Biden administration’s view, the Ukraine war is a decisive historical moment that requires countries to choose a side, with the OPEC+ cut putting the Saudis closer to the Russians. The Saudis see an opportunity to assert their own interests in a world where the U.S. isn’t the undisputed superpower, saying they can support Ukraine and work with Russia in OPEC+ at the same time.

Saudi officials say they are frustrated the relationship is still viewed through the narrow lens of oil and security. Riyadh has framed the recent OPEC+ decision as vital to its core national interests, a technical decision that they say was needed to prevent a precipitous drop in crude prices. Prince Mohammed now sees high oil prices as perhaps his last shot to use the kingdom’s natural resources to modernize the Saudi economy and build a post-oil future.

Saudi Arabia plans to highlight that effort this week in Riyadh, with its Future Investment Initiative conference. Organizers said they didn’t invite U.S. officials, who have previously attended at the cabinet level, after the Biden administration weighed withdrawing from participating.

“Our economic agenda is critical to our survival. It’s not just about energy and defense,” the Saudi foreign minister, Prince Faisal bin Farhan, said in an interview. “It may have been 50 years ago but that certainly is not the case today.”

Prince Faisal denied that Prince Mohammed had privately derided Mr. Biden or told aides he was unimpressed by him and favored Mr. Trump.

“These allegations made by anonymous sources are entirely false,” said Prince Faisal. “The kingdom’s leaders have always held the utmost respect for U.S. presidents, based on the kingdom’s belief in the importance of having a relationship based on mutual respect.”

U.S. officials said Mr. Biden has pushed the relationship beyond oil by working to deepen ties between Saudi Arabia and Israel, two countries that drew closer under Mr. Trump and are aligned in their view of Iran as the region’s biggest threat. Though Israel and Saudi Arabia have no formal diplomatic relations, they have been secretly expanding their security cooperation with White House help.

Adrienne Watson, spokeswoman for the White House National Security Council, said Mr. Biden “has engaged with leaders from across the region” to establish “a more stable and integrated Middle East.”

The path ahead is likely to be rocky. At risk for Washington are counterterrorism operations, efforts to contain Iran and Israel’s deeper integration into the region. For the Saudis, a breakdown with the U.S. would jeopardize its national security and ambitious economic reforms. Mutual trade and investment worth hundreds of billions of dollars are also on the line.

The next big test comes in early December, when three events with major significance for global energy markets are set to collide: another OPEC+ meeting and plans by the European Union for an embargo of Russian oil and by the Group of Seven wealthy nations to cap the price of Russian crude.

The Saudis have signaled that they could raise oil production in December if the market loses Russian oil because of the EU embargo or the G-7 price cap, according to people inside the Saudi government. U.S. officials, skeptical that Riyadh would or could do that, say this will be a key litmus test for where the kingdom stands: with Ukraine and its Western backers or with Russia.

Mr. Biden and Prince Mohammed tried to build a personal rapport during the president’s trip to Jeddah in July, where they fist-bumped ahead of a three-hour meeting. But the president angered the royal by immediately raising human-rights allegations, people close to the talks said, including the 2018 death of Jamal Khashoggi, a Saudi journalist based in Washington who was killed and dismembered by a team of Saudi agents inside the kingdom’s Istanbul consulate.

The killing of Mr. Khashoggi, who was a Washington Post columnist, remains the most important flashpoint between the two men. Among Mr. Biden’s first acts as president was releasing an American intelligence report concluding that the crown prince had ordered the operation to capture or kill Mr. Khashoggi, an allegation the Saudi government denies.

The disagreement reflects Prince Mohammed’s sense that it is unacceptable to keep raising the killing and Mr. Biden’s sense that U.S. values demand it not be glossed over, said Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies, a Washington think tank.

“The American bet is that the Saudis need the United States and will come around, and the Saudi bet is the opposite,” Mr. Alterman said. The White House has ignored the personal nature of U.S.-Saudi ties, he added, either because it can’t figure out how to deal with Prince Mohammed or it doesn’t want to.

In the past, Saudi kings and American presidents were able to smooth out turbulent periods with strong personal relations. In 2005, just a few years after 15 Saudis participated in the Sept. 11, 2001, terrorist attacks, President George W. Bush had hosted Crown Prince Abdullah at his Texas ranch, where the two men were photographed holding hands.

In the early 1970s, the Saudis partially nationalized American oil interests in the kingdom and launched an oil embargo that ushered in crippling inflation. Yet President Richard Nixon met King Faisal and toasted his wisdom during a state dinner in Jeddah in 1974.

“When you’re dealing with a country that’s basically run by five people, it has to be on a personal level,” said Steven Cook, a Middle East expert at the Council on Foreign Relations, a New York-based think tank.

Since the 1940s, Washington’s relationship with this insular dynastic monarchy grew around an implicit understanding that the U.S. would ensure Saudi Arabia’s territorial integrity and the Muslim kingdom would keep oil flowing to a global economy dominated by America.

Those calculations have changed over time. The Saudis once sold the U.S. over 2 million barrels of oil every day, but that’s fallen to less than 500,000 barrels a day, according to the U.S. Energy Information Administration. The U.S. grew to become the world’s biggest oil producer, and China is now the biggest buyer of Saudi oil, followed by India.

After decades of war, Washington has sought to reduce entanglements in the Middle East to focus on a rising China and resurgent Russia. The main American initiative in the region—the Obama-era nuclear-containment deal with Iran—has also strained relations with Saudi Arabia, which opposes lifting sanctions unless Tehran also reins in its support for regional militias and the proliferation of ballistic missiles that threaten Riyadh. The Saudis were irked by the Obama administration negotiating with their archenemy about vital national security issues without consulting them.

“Oil-for-security is dead,” said Ayham Kamel, head of Middle East and North Africa at political-risk advisory firm Eurasia Group. “The two sides seem to be having a problem accepting that that old deal is over, with Riyadh focused on security and Washington focused on oil.”

When Mr. Biden was elected, Prince Mohammed huddled with advisers at a seaside palace to complete a plan to woo the new president, according to people familiar with the matter.

The Saudis delivered a few concessions on a topic Mr. Biden had campaigned on—human rights—including the eventual release of Loujain al-Hathloul, a prominent women’s-rights campaigner who says she was tortured in detention, and two Saudi-American prisoners. And they quickly patched up a feud with neighboring Qatar after leading an economic boycott against it which Mr. Trump had initially supported.

Mr. Biden’s response shocked Prince Mohammed, the people said. In his first weeks in office, the president froze Saudi arms sales, reversed a last-minute Trump administration decision to label Yemen’s Houthi rebels a foreign terrorist organization, and published the intelligence report on Mr. Khashoggi’s killing which Mr. Trump had previously dismissed.

For the Biden administration, these steps were a necessary correction. To the Saudis, Mr. Biden’s early moves were a slap in the face.

“The interactions with the Biden administration were so bad for the first two years that one visit was insufficient to propel Saudi to walk away from” its oil alliance with Moscow, said David Schenker, a senior State Department official under the Trump administration and now a fellow at The Washington Institute for Near East Policy, a think tank.

In a relationship that has historically been steered by presidents and kings themselves, the White House handed the Saudi file to Brett McGurk of the National Security Council and Amos Hochstein at the State Department, who, despite extensive diplomatic experience, carry little of the clout or policy mandate of officials who handled the relationship in previous administrations.

The pair communicated mainly with two of Prince Mohammed’s brothers: Prince Abdulaziz, the oil minister, and Prince Khalid bin Salman, who was recently elevated to defense minister. The two Americans lobbied hard inside the administration for engagement with the Saudis, and when the Saudis bucked the U.S. on oil production over the summer, Mr. Hochstein sent Prince Abdulaziz a note suggesting he felt betrayed.

The White House is wary of blowing up the relationship, which could jeopardize sensitive security operations. Mr. Sullivan said the president would consult with members of both parties—some of whom are vowing dramatic action—about how to respond to Saudi Arabia, including potential changes to U.S. security assistance, when Congress reconvenes after the midterm elections next month.

“The president isn’t going to act precipitously,” Mr. Sullivan told CNN.

The Saudis know they cannot replace the U.S. as a security partner overnight. Shortly after the meeting in Vienna, Saudi officials met with think tanks and lower-level U.S. officials to make their case. They said Washington has underestimated how much Saudi Arabia has helped Ukraine and they were surprised by the American reaction to the OPEC+ decision, meeting attendees said.

One drastic option on the table: Saudi officials have said privately that the kingdom could sell the U.S. Treasury bonds it holds if Congress were to pass anti-OPEC legislation, according to people familiar with the matter. Saudi holdings of U.S. Treasurys increased to $119.2 billion in June from $114.7 billion in May, according to U.S. Treasury data. Saudi Arabia is the 16th largest holder of U.S. Treasurys, according to federal data.

“It’s hard to imagine either side saying ‘All right, let’s put this back together,’ ” said Mr. Cook of the Council on Foreign Relations.

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