Saudi-US Relations in a Changing Global and Regional Landscape

Even by the breathless standards that Saudi Arabian Crown Prince Mohammed bin Salman Al Saud has set for himself and the people around him, the Saudi leadership has had a supercharged start to the summer. The June 6 announcement that Saudi Arabia’s Public Investment Fund would merge state-funded LIV Golf with the PGA Tour upended the normally staid world of men’s professional golf and heralded the kingdom’s arrival as a major player in global sports. One week later, the crown prince arrived in Paris for a lengthy stay that combined elements of diplomacy, business, and lobbying for the selection of Riyadh as host of the Expo 2030 world’s fair. Barely a day goes by without new reports about deals between Saudi entities and international partners, and the country has emerged as one of the geopolitical “winners” in the wake of the full-scale Russian invasion of Ukraine in February 2022.

The centrality of Saudi Arabia to so many of the evolving narratives of world politics (and of sports) in 2023 is definitive evidence that any lingering sense of fallout from the killing and dismemberment of Washington Post columnist Jamal Khashoggi inside the Saudi Consulate in Istanbul in October 2018 is well and truly over. While much of the outrage at the killing was concentrated in western capitals, the affair did cast a long shadow over the crown prince and his ability to travel freely and conduct affairs of state. Since 2021, Mohammed bin Salman and those around him have worked to recast him as a statesman, especially on the regional stage, and to rebuild an image tarnished by the missteps of the early years of his rise to power in Saudi Arabia. Events since February 2022 have accelerated Mohammed bin Salman’s reemergence on the international stage as, ironically, the western isolation of Russian President Vladimir Putin has hastened the political rehabilitation of the crown prince.

The Struggle to Define a New US Approach

Members of the Biden administration have struggled to define a new approach to engaging with a Saudi leadership that the US president, when a candidate vying for the Democratic Party’s nomination in 2019, vowed would “pay the price” for killing Khashoggi. Joe Biden has spent most of his subsequent term in office walking back that statement, although he did initially attempt to hold the line at engaging only with Saudi Arabian King Salman bin Abdulaziz as his counterpart as head of state. A combination of King Salman’s frailty and his gradual withdrawal from public life, along with the political reality of senior decision-making in contemporary Saudi Arabia forced a change in tack, especially after oil and gas prices soared following the Russian aggression against Ukraine.

The fallout from Biden’s fist-bump with MbS illustrates some of the dilemmas in recalibrating policy engagement with a confident and assertive Saudi leadership.

For these reasons, Biden traveled to Jeddah in July 2022. The fallout from President Biden’s fist-bump there with Mohammed bin Salman illustrates some of the dilemmas in recalibrating policy engagement with a confident and assertive leadership that is more willing than any of its recent predecessors to shift Saudi foreign policy onto a non-aligned pathway. Members of the Biden administration briefed analysts about Biden’s visit, saying that it was about securing Saudi support for an increase in oil production that could help reduce gasoline prices and ease cost of living pressures in the United States. However, OPEC+ cut output slightly in September 2022, a decision that was quickly followed by a far greater cut in production one month later. The October OPEC+ decision led to a sharp war of words in which both the Saudis and the Americans accused each other of trying to politicize aspects of energy policymaking.

Both in October 2022 and again in April 2023, when members of OPEC+ announced an additional surprise cut in production in an effort to shore up weakening oil prices, the optics of the Saudi leadership appearing to side with Putin’s Russia and disregarding longstanding points of interest with the United States were visible. Higher oil revenues do benefit the Russian economy and by extension its ability to wage war in Ukraine; but Mohammed bin Salman’s primary motivation in cutting oil production has been his calculation of domestic interests first and foremost, consistent with his broader “Saudi First” approach to decision-making. Ahead of the October 2022 cut, Mohammed bin Salman reportedly was shown analysis of oil market scenarios prepared by his half-brother, Saudi Minister of Energy Abdulaziz bin Salman, which suggested that oil prices could fall to $50 per barrel and that such a level would jeopardize the implementation of Vision 2030 and its associated “giga-projects.”

The Centrality of Vision 2030

So much of Mohammed bin Salman’s credibility as ruler-in-waiting has been vested in Vision 2030—which he launched in April 2016 as deputy crown prince—that he can little afford to see it fall short or underwhelm, even if it has few measurable milestones or indicators. In an Al Arabiya television interview in 2016, Mohammed bin Salman famously said, “I think in 2020, we can live without oil,” in reference to the economic diversification component of his Vision 2030 plan. But the reality is that the opposite has happened and he now finds himself reliant on higher oil prices to generate the revenues to finance his expensive giga-projects, such as Neom and the Red Sea development. This in part reflects the disappointing level of incoming foreign investment into Saudi Arabia, which plummeted after the Ritz-Carlton detention in 2017 of many of the most prominent members of the local business elite, and which has remained at stubbornly low levels ever since.

This year marks the halfway point between the launch of Vision 2030 in 2016 and its endpoint in a year that has assumed totemic significance for Saudi Arabia and Mohammed bin Salman. In this next phase it is imperative for the crown prince that the giga-projects move into construction and delivery phases to ensure tangible outcomes and visible results by the end of the decade. This is why the other development in Saudi policy over the past year, its détente with Iran, has unfolded, again with lessons for the way Saudi decision-making is assessed and interpreted in Washington. If the giga-projects are to attract the 20 million additional residents and the visitors that Mohammed bin Salman has planned to have by 2030, Saudi Arabia cannot afford to have missiles and rockets slamming into its cities and towns.

If the giga-projects are to attract the 20 million additional residents and the visitors by 2030, Saudi Arabia cannot afford to have missiles slamming into its cities and towns.

Memories are still fresh of the missile strike on an oil facility near Jeddah in March 2022, less than 10 miles from where the Saudi Arabian Grand Prix was taking place. Footage of black plumes of smoke near the racetrack spread around the world and generated negative headlines and perceptions of a country under attack and at risk from the spillover of the Yemen conflict. It is precisely this narrative that Mohammed bin Salman needs to overcome if Saudi Arabia is to attract the numbers of residents and visitors needed to populate its giga-projects as they become operational. The March 2023 agreement in China to restore diplomatic relations with Iran can, on the Saudi side, be seen as a desire to de-risk the regional landscape as attention focuses on delivering Vision 2030.

Self-Interested Saudi Calculations

The timing of the Saudi-Iran deal (and the fact that it was announced in Beijing) spoke volumes about the divergence of rhetoric and reality in much of the US-centric debate about Saudi Arabia in 2023. Just a day before the sudden announcement of the China-brokered deal, which took most observers completely by surprise, multiple articles appeared in mainstream American media outlets which laid out the security assurances and other concessions that the kingdom reportedly would “demand” in return for normalizing with Israel, such as fewer restrictions on arms sales and US support for a civil nuclear program. These articles’ near-synchronous publication suggested that a well-coordinated briefing plan was at work, and Biden administration officials have made little secret of the fact that they view a Saudi-Israeli agreement to establish formal relations as a regional policy priority in the runup to the 2024 presidential election.

Saudi-Israeli normalization would provide a significant foreign policy boost to the Biden White House, whose other regional priorities when it took office in 2021—reengaging Iran in the Joint Comprehensive Plan of Action and ending the war in Yemen—have seen little progress. Similarly, a deal with Saudi Arabia would be a major political triumph for Israel’s embattled prime minister, Benjamin Netanyahu, but the challenge of balancing an extremist domestic agenda with pragmatic engagement with Arab partners has already proven too much for the Negev Forum of technocratic cooperation with states that have normalized relations with Israel, even without adding Saudi Arabia to the mix. But the focus on what normalization means for the Biden White House or for Israel misses the point that for Mohammed bin Salman this is a card he can only play once, and he will only do so when he calculates that it can generate maximum gain. On this specific issue, the White House appears out of step with the Saudi leadership, especially as attention in Riyadh begins to turn toward what might happen in the 2024 election.

Normalization with Israel is a card MbS can only play once and he will only do so when he calculates that it can generate maximum gain.

Two points stand out when assessing the future of US-Saudi relations, at least in the near term. The first is that Saudi and US officials are operating on completely different time horizons, as the Saudi leadership focuses on 2030 and looks ahead to mid-century challenges, which will do much to shape the context in which Mohammed bin Salman will grow older as king. These include issues related to energy transitions around the world and to positioning Saudi Arabia as a not-disinterested player at the table when key global decisions are being made. When western officials talk of achieving net-zero targets by 2050, they are potentially four or five leaderships away from that date, whereas Mohammed bin Salman likely plans to remain in power through 2060, when the kingdom expects to reach net-zero emissions. Somewhat counterintuitively given Saudi Arabia’s continuing reliance on revenues from the sale and export of oil, the fact that the broader global transition will happen during Mohammed bin Salman’s lifetime means he has a direct personal stake in navigating a sustainable path forward for Saudi Arabia.

The second pertinent point is that Saudi-US ties appear to be more purely based on a transactional approach shorn of shared mutual geopolitical or other interests such as the “oil for security” basis that was often, but not altogether accurately, said to underpin the bilateral relationship. Ironically, the transactional approach was seen to be a feature of the Trump administration’s unconventional approach to policymaking, and one that initially appeared to resonate with Saudi (and Emirati) officials. However, the lack of an overt US response to attacks on maritime and energy targets in Saudi Arabia and the UAE in 2019, culminating in missile and drone strikes on Abqaiq and al-Khurais that temporarily knocked out half the kingdom’s oil production that September, caused shockwaves in Riyadh and Abu Dhabi, and created the space and the impetus for the outreach to Iran that generated the regional détente.

A more transactional era would require parties to calibrate areas to prioritize and identify those that can be amenable for a negotiated compromise on an issue-specific basis to better reach the right “price” with which both sides can live. This would involve rethinking or updating some of the shibboleths that have grown up around the US-Saudi relationship over the eight decades since the historic meeting between President Franklin D. Roosevelt and then Saudi King Abdulaziz aboard the USS Quincy in 1945. The hard reality is that for a Saudi leadership planning for the 2030s and beyond, it is China which looms large as a present and long-term economic and energy partner. Where this leaves the United States, especially in a more polarized era of power competition and strategic rivalries, is an open question, which is why the low-key yet essentially supportive US reaction to the China-brokered Iran-Saudi deal may be a harbinger for how ties may evolve in the future and should be watched for how, if at all, it impacts political and security dynamics as well.

The views expressed in this publication are the author’s own and do not necessarily reflect the position of Arab Center Washington DC, its staff, or its Board of Directors.