Sinking US-Saudi Relationship
For decades, Saudi Arabia has played a dominant geopolitical role in the Middle East and in global energy supply. Central to this stature has been its unique relationship with the US, built upon Saudi Arabia’s role as a guarantor of global energy security in exchange for the US guarantee of military security for the kingdom and royal family. The rise of US oil output in recent years has challenged the energy security component of this relationship, thus weakening the US security commitment. Now, the dramatic disruption to global oil markets and the world economy caused by the coronavirus pandemic points to a further decline in the US-Saudi relationship regardless of who wins the next US presidential election. Saudi Arabia’s regional and global relevance in a post-coronavirus world will be greatly reduced.
Most historians date the special relationship between the US and Saudi Arabia to the historic meeting between President Franklin Roosevelt and King Abdulaziz aboard the USS Quincy in the Red Sea in January 1945. The twin pillars upon which this relationship was constructed — oil and military security — began by trading oil concessions for American companies for access to US weaponry that would help secure the kingdom from external threats. In the ensuing decades, the scope and scale of this relationship changed, but the underlying foundation of energy supply for military security remained the same.
When President Donald Trump made Saudi Arabia the destination of his first state visit, he sent a clear signal that he recognized the primacy of the US-Saudi relationship. Under Trump, however, the underpinning principles of this relationship were changed from one in which the traditional mutual security guarantees were replaced by a more conventional business-like bottom-line calculation. Trump had inherited a US shale oil industry on the ascent, and along with it the promise of US energy independence. The earlier Saudi efforts to slow the growth of US shale oil and preserve Saudi market share in 2015-16 had failed, with US shale production emerging intact. But the US-Saudi dynamic had altered to include an aspect of US economic protectionism that had previously been absent.
From the perspective of the Trump administration, the cost of maintaining an active military presence in the Mideast Gulf was worth it only if Saudi Arabia worked to keep oil prices at levels considered viable for US shale producers, and it continued to purchase billions of dollars of US weapons. In short, the traditional broad energy and military security relationship had been replaced by a one-sided business arrangement that only worked if the US profited. There were numerous facets to the US-Saudi relationship under Trump, including a personal friendship between Trump’s son-in-law Jared Kushner and Saudi Crown Prince Mohammed bin Salman, which manifested themselves in different ways. But these only mattered so long as the financial ledger between the two nations remained in the black for the US.
Enter the Coronavirus
The combined impact of the global coronavirus pandemic and the Russian-Saudi oil price war have put the US-Saudi ledger firmly in the red. The recent humiliation of seeing the West Texas Intermediate benchmark crude oil price hit negative figures for the first time in history, combined with the ongoing collapse of US shale production, have put the US-Saudi relationship in the crosshairs of both Trump and influential lawmakers in Congress from states that are suffering most from the shale oil bust. With members of the US Senate chastising the Saudi Arabia and the Trump administration looking for ways to punish it for starting the oil price war, it is clear that the energy security pillar of the US-Saudi relationship has collapsed. Saudi Arabia has lost its status as the guarantor of US energy security, and with that goes the perceived need to maintain a costly US military presence in the region designed to protect Saudi Arabia and other Gulf Arab oil production.
The one remaining issue that keeps the US actively engaged in the region is Iran. The Trump administration has branded Iran as a rogue nation that is inherently destabilizing for both the region and the world, prioritizing Iran’s nuclear and ballistic missile programs for greatest concern. Geopolitically, Saudi Arabia has been at the forefront of regional pushback against the expansion of Iranian influence since the Iranian Revolution in 1979. Over the course of the past few decades, the Saudi-Iranian competition for regional dominance has coalesced along a so-called Shiite Crescent stretching from Lebanon, through Syria and Iraq, and into Iran.
Despite active US military involvement in both Iraq and Syria, Iran has emerged as the dominant force throughout the Shiite Crescent, which Iran calls the Axis of Resistance. The scope of Iranian influence expanded further in 2015, when Saudi Arabia intervened in Yemen. The subsequent conflict with the Iranian-backed Houthi militia has not turned out well for the Saudis and their allies. Indeed, save for the US military presence in the Gulf, Saudi Arabia would be facing a potential existential threat from Iran and its regional proxies. With the energy security component of the traditional US-Saudi relationship no longer carrying the weight it once did, the US commitment to the preservation of the Saudi state now hinges primarily on US-Iranian animosity and Saudi Arabia’s ability to support this policy. Unfortunately for Saudi Arabia, this is not the basis for sustainable policy.
Trump and Iran
With Iran, the Trump administration has been engaged in a high-stakes game of economic coercion built around stringent economic sanctions that target virtually every segment of its economy, including the vital energy sector. The goal of these sanctions is to compel Iran to enter negotiations over a new nuclear deal that would replace the Joint Comprehensive Program of Action (JCPOA), which came into being in 2015 under President Obama. Since becoming president, Trump has derided the JCPOA as a “bad deal” that facilitates rather than degrades Iran’s ability to produce a nuclear weapon. In May 2018, Trump withdrew from the JCPOA, and shortly thereafter initiated a program of “maximum pressure” built around sanctions-based economic strangulation.
While the “maximum pressure” campaign is painful for Iran, the Iranian economy has proven more resilient to the sanctions than had been anticipated by US policymakers. Moreover, rather than setting back Iran’s nuclear and ballistic missile programs, Iran has used the US withdrawal from the JCPOA and the subsequent implementation of sanctions as evidence of noncompliance. This has prompted Iran to lift almost every technical restriction imposed under the JCPOA, allowing it to increase enrichment capabilities. Furthermore, Iran has similarly expanded its capabilities in ballistic missiles, fielding new high-precision weapons and successfully launching a satellite into orbit using technologies transferable to military applications. In October, sanctions prohibiting the sale of conventional weaponry to Iran that have been enshrined in the JCPOA will be lifted, allowing Iran to further strengthen its position.
The Trump administration’s Iran policy is in a state of flux. Trump has ordered the US Navy to sink any Iranian ships that might harass US vessels in the Mideast Gulf. Secretary of State Mike Pompeo has indicated that the US will seek to compel the UN Security Council to implement so-called snap-back sanctions lifted when Iran implemented the JCPOA. He is using arcane legal reasoning based on the notion that the US is still a party to the JCPOA, despite having officially withdrawn in May 2018. The US actions appear akin to desperation, born of a recognition that current policies are failing. The US lacks a well-thought-out diplomacy toward Iran with a viable endgame.
As ineffectual as US policy toward Iran is today, it will become even more so in a post-coronavirus world. The current unprecedented oil supply glut promises to be long-lasting, reducing the importance of the Mideast Gulf to US national security. That in turn reduces the importance for the US of containing Iran through a high-risk policy that threatens war at any moment. While the Trump administration will continue to play the Iran card in the lead up to the November presidential election, the reality is that US policy vis-à-vis Iran will most likely soften due to the shifting geopolitical realities of a post-coronavirus world, whether implemented under a second Trump term or new Democratic leadership. Once the US drifts away from confronting Iran, there will be little left to sustain its expansive and expensive military footprint in the region. The special US-Saudi relationship will have lost its last pillar of support, and Saudi Arabia will have to navigate the troubled geopolitical waters of the Gulf without its past US security guarantees.