Saudi feud leaves the U.S. asking if relations are beyond repair
(Bloomberg) — An escalating public dispute over oil between the Biden administration and Saudi Arabia risks causing irreparable harm to U.S. relations with the crucial Mideast partner, according to current and former government officials briefed on the feud.
Dueling statements from Washington and Riyadh in recent days over last week’s OPEC+ decision to cut production underscore just how badly the U.S.-Saudi relationship has deteriorated under President Joe Biden, with each side accusing the other of acting in bad faith.
Saudi Arabia said the cuts were an attempt to ease market volatility, underscoring that relations with the U.S. must be built on trust. A White House statement on Thursday sneered what it called Saudi Arabia’s attempt to “spin or deflect.” Secretary of State Antony Blinken echoed Biden’s warnings that the decision would have “consequences.”
The remarkably public contretemps reflects brewing impatience within the White House now that it has little to show for Biden’s outreach to the Saudis -- which he was compelled to make as gasoline prices soared over the summer, despite his campaign promise to treat Crown Prince Mohammed bin Salman as a “pariah.”
That frustration is shared by the Saudis. One Gulf official said there’s a real sense of grievance that the US didn’t help Saudi Arabia during periods of low oil prices but is asking for its help now that it wants to keep prices from rising ahead of next month’s US midterm elections and amid the struggle to deprive Russian President Vladimir Putin of oil revenue.
Another official in the Gulf region insisted that despite the US complaint that Saudi Arabia is helping Russia in its war on Ukraine, the oil production cut really is aimed at balancing supply and demand -- and serving their own economies without causing international harm.
The two sides now appear to fundamentally misunderstand each other, according to current and former officials in the US and in the Gulf, several of whom requested anonymity because they weren’t authorized to speak publicly. One person familiar with the dispute said there was dismay that the White House had responded with such anger, suggesting the US should have taken the high road.
“They’ve once again personalized the problem, which will lead to another humiliating climbdown when they need something from Saudi Arabia,” Kori Schake, director of foreign and defense policy studies at the American Enterprise Institute, said of the US position. “They’d have been smarter to have pointed out that Saudi Arabia frequently refuses US requests to use oil as a policy tool, when the Saudi economy is wholly reliant on it and has an overriding interest in price stability.”
“The relationship is likely unrecoverable,” Schake said.
Hopes for resuscitating the relationship rest on security and energy ties and the fact that, for all the public accusations, neither side wants to sever those contacts completely. The US and Saudi Arabia have a long history of intelligence-sharing, and the US sent what US officials called a significant number of Patriot anti-missile interceptors to Saudi Arabia in May.
Despite some calls in Congress to curb Saudi purchases of US weapons, the administration is pushing back against any restrictions on arms sales to the kingdom, said Scott Modell, managing director of Rapidan Energy Group. However dissatisfied the Saudis may be with delays in delivery of US weapons or assistance due to the war in Ukraine, “they have to grin and bear it” because there’s no substitute for the US when it comes to defense and security, he said.
For now, though, talk in the US is of punishment, not rapprochement. Officials say Biden is weighing his options for how best to respond.
One possibility is a bill known as NOPEC, legislation that would enable the US to sue OPEC producers for manipulating the energy market. The Biden administration already plans to sell at least 165 million barrels of crude through November from US reserves to combat rising prices. Biden could order more oil releases and try to drive down the price of oil further.
One former US official, who still speaks to the current administration and asked not to be identified, said the administration has few options that would change the crown prince’s calculus.
And regardless of the security implications, some members of Congress are growing more impatient, looking at arms sales as an important way to exact retribution whether the White House wants to or not.
“For us at this moment to have a longstanding partner like Saudi Arabia help Russia fund their war of aggression against Ukraine was a very bitter disappointment and a big surprise,” Senator Chris Coons, a Delaware Democrat, told CNN on Friday. “I think you’ll see both the administration and the Senate take action, and one of the most likely actions is to stop any future arms sales.”
The Saudi military is 75% composed of US equipment, including high-end systems such as fighter jets, said Bruce Riedel, a senior fellow at the Brookings Institution and director of the Brookings Intelligence Project. That equipment depends on US contractor support and spare parts, offering an obvious point of leverage for Washington.
Consequences such as threatening an end to arms sales would also mark a whipsaw in policy for Biden. The US has some restrictions on sales of precision-guided munitions, but the Biden administration has generally loosened its restrictions relative to its rhetoric early on, according to a congressional aide.
At the same time, even as Saudi Arabia may want to retain contact, the episode was also a reminder of just how much the US relationship to the Middle East has changed. Gulf nations have shown an increased willingness to challenge or defy the US as they seek out other partners such as China.
“I can’t imagine a greater humiliation -- both in terms of his domestic political standing, and his efforts on unity in the international arena on Ukraine and Russia -- than what MBS did” to the American president, said Aaron David Miller, a senior fellow at the Carnegie Endowment for International Peace. “At a minimum, he didn’t really care what the impact was for Joe Biden.”