Saudi - US, a defining moment in the relationship?
It’s interesting to hear people arguing in Saudi Arabia’s defence, that in leading OPEC to oil production cuts, it is just acting in its own economic self interest. And that everyone does that. Fair comment if only this were a crisis around very narrow economic self interest. But it is not. It is not about Saudi getting an extra $10 a barrel on oil, and real GDP growing an extra 0.5%, and the US and West suffering the inverse losses in a zero sum economic game.
For the US, and the West, this is about absolutely core security interests. The Saudi leadership might not have realised but NATO sees the war in Ukraine as part of an existential security threat from Russia. It’s about survival of systems, Western Liberal Market Democracy versus Russian Kleptocracy.
Biden went to Riyadh, expended a huge amount of political capital, kissing the ring of MBS, because he realised the seriousness of the fight with Russia, just what is at stake. Just imagine that. This underlined just how important this is to the US. And the response from Saudi was to say, our economic interests come before your security concerns, and not only that, Saudi snubbed the US by allying with Russia. It compounded the insult.
And let’s not forget here that for Saudi, whether oil prices are $70 or $90 a barrel makes little difference in the short term, as it still has huge cash buffers, and after recent fiscal reforms likely the oil price balance for the budget is now nearer to $60 a barrel than $70. If the US is asking Saudi to live with a short period of lower oil prices for the security of the world, and to help alleviate a global cost of living crisis, Saudi surely has enough financial insulation to do that. Biden asked Saudi Arabia for a modest concession that was relatively easy to fulfil, not rally a big ask, in the big scheme of things. He was not asking Saudi to drive oil prices down to $40-50 a barrel to completely cripple Moscow. The ask was a modest sacrifice by Saudi Arabia for something that is of existential importance to the West.
You could say this is the US’s first Gulf War moment. Back then in Saudi Arabia’s hour of need with Iraqi troops in Kuwait, Saudi asked for Western support, and it was forthcoming. This is the same moment for the West, I think the West views this as payback time from Saudi. You asked for our help 30 odd years ago, and we came to your defence. Putin represents the biggest security risk to NATO since the end of the Cold War, actually for much longer, since the Cuban missile crisis, 60 years ago. It asked for help from Saudi, and everyone now knows where we all stand. Saudi failed the West in its hour of need.
That’s a huge call by Saudi, pinning its colours to Putin’s mast, perhaps wrongly assuming that Putin will be around for some time to come. Indeed, my read at this stage is that Putin is living on borrowed time and his inevitable defeat in Ukraine will bring seismic political shifts in Russia, which may not be to Saudi’s liking. At that point having old allies like the US might be more valuable again.
But looking thru all this, this is surely a defining moment in US - Saudi relations. There really is no going back from this one.
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