Washington’s new Middle East policies looks like sandcastle. Targeting MBS means putting region at peril The new media frenzy about a possible full-out confrontation between the US Biden Administration and Saudi Crown Prince Mohammed bin Salman is a sign that Western political leaders are out of touch with reality.
Last week’s revelations published in a declassified report by U.S. security services on the role of MBS in the Khashoggi murder show not only the lack of proof available, but could also lead to a full divorce between Saudi Arabia and the U.S. A growing amount of Western media publications argue that the Saudi Crown Prince should not only be sanctioned, but that Washington also should reconsider its former in-depth cooperation with the Kingdom.
Several U.S. experts have been quoted in international media calling for a clear change in US strategy towards the Kingdom, including a possible removal of MBS as Crown Prince via support of former Saudi Crown Prince Bin Nayef or other Saudi royals. In a clear break with US power politics we’ve seen during the last decades, where the removal of third party power brokers was blocked, a new era seems to be looming on the horizon.
At the same time, Biden finds himself on a slippery slope regarding the ongoing confrontation with Iran, by putting additional sanctions on Iran but at the same time removing one of the region’s main Iranian backed armed groups, Yemen’s Houthi rebels, from the U.S. terrorism list. The results this policy change have already become very clear. A new aggressive drone and ballistic missile campaign has been started by the Houthis to hit Saudi strategic airports and oil infrastructure targets on the Red Sea and East Coast. The high-profile attack on Aramco oil infrastructure this week shows that the Kingdom is still under threat. Some even state that the attacks on the Eastern Province, Saudi’s main oil and gas production region, could not have been done without the full military and logistical support of Iran.
Related: Iran Pushes Development Of Major Oil Region Under 25-Year China Deal
Still, the military capabilities of Houthi rebels and Iran are at present the least of the kingdom’s concerns. The direct diplomatic fall-out of the publication of an intelligence report by the Biden Administration in which the Saudi Crown Prince, who is expected to become Saudi King in the next few years, is being implicated as potential instigator and backer of the Khashoggi murder, is unprecedented. To have U.S. citizens and politicians call for new inquiries about the role of MBS and his security apparatus in the murder at the Saudi consulate in Istanbul is one thing, but having official documents, declassified by the Biden Administration, directly accusing MBS is calling for potential rifts that could have a fall-out for the whole region.
The attack on Ras Tanura, which is Saudi Arabia’s main crude oil and petchem products export facility had an impact on the market. Crude oil prices spiked, but the effect was only marginal. Even that the current attack has not received the same attention as the Abqaiq attack in 2019, which had a much larger impact on Saudi oil production, the significance seems to be underestimated. A potential destruction of critical facilities in Ras Tanura would have been a shock to the market, even in the light of still high storage volumes worldwide. No oil flows however seem to have been constrained, so futures relaxed again. Still, the market should keep a wary eye on the area, as possible new attacks or even combined attacks on Abqaiq-Ras Tanura by the Houthis and/or Iran could be an option currently being discussed by Tehran hard-liners.
Until now, the impact has been only superficial, but taking into account the growing capabilities of Houthi drone and missile arsenals, or the vast, almost Russian style, capabilities on the other side of the Gulf, other options are clearly on the table.
What should markets get worried is the fact that in the eyes of Iran, Biden and Europeans have almost given green light to hardliners in Tehran to show their muscles. The ongoing Houthi operations are a clear sign that Biden’s current soft-power or even appeasement approach is already backfiring.
Related Video: Can Saudis Defend Aramco from Houthis?
Washington’s diffuse approach to Iranian sanctions and the JCPOA is another bone of contention. In the first months of his Presidency, Biden has not shown any clear strategy, leaving too much room for interpretation. Whatever people think about former US president Trump’s policies, his Iran policies were clear. It seems that Iran has almost fallen off the Resolute Desk in the White House, no open and clear way-forward is being introduced. The only clear path currently painted is that Riyadh and Washington are on a collision course. The Biden Administration seems to hold the view that the US is still the sole power broker in the region, so soft power or pressure put on Arab regimes will reap the rewards sought for. This is a clear misconception, partly based on still existing Obama Era assessments, which are no longer valid.
Maybe to the surprise of Washington-based analysts, MBS is not sitting still. The Saudi Crown Prince, is making a lot of headlines with his aggressive economic diversification plans and dreams, and has shown that his international position has not yet diminished. The last days, a flurry of diplomatic and high-level meetings have been held in Riyadh, where Russian Minister Lavrov, Jordan’s King Abdallah, Malaysian Prime Minister Muhyiddin Yassin and others have been holding meetings to discuss economic and geopolitical issues. Saudi Arabia's top diplomat Prince Faisal also has been hosted by Qatar's ruler Emir Sheikh Tamim Bin Hamad Al-Thani on Monday in Doha, showing renewed interest in expanding cooperation.
At the same time, Saudi ministers have been flying to Saudi major clients, such as China. Russia is currently using the cooling Saudi-US relations as a possible wedge. Moscow and Riyadh already are cooperating fully in energy and logistics, as statements today reaffirmed. Both stated that the OPEC+ cooperation is still very strong and will continue. Moscow is very pleased with the Biden Administration’s lack of strategy for the Arab region.
Putin and his emissary Lavrov hope to be able to capitalize on Biden’s ongoing mistakes, not only in Riyadh, but also Abu Dhabi, Bahrain and Egypt. A critical outcome of US pressure on MBS would also be growing fears in Cairo, Abu Dhabi and other places. A possible realignment of these leading Arab countries, leaving the Atlantic sphere of influence while joining the growing Moscow-Beijing axis is not the outcome that Washington or Brussels would like to see.
Pragmatism is needed and neo-realism also. As Machiavelli and Von Clausewitz clearly stated “to rule or influence a region, one should regard possible strong relationships with the Prince”. If removing the Prince results in a new Prince, instability is the outcome. Stability is needed, Biden’s Gulf strategies are counterproductive, to say the least. By indicating or affronting a “King-to-Be”, enemies are being made. Washington’s culture of backstabbing and rumor carousels are maybe effective in the West, in the Arab world “a man’s word is forever, friendship also”….but this is the same for making enemies.
By Cyril Widdershoven for Oilprice.com
ADVERTISEMENT
MOre Top Reads From Oilprice.com:
- How Oil Could Go To $100 Per Barrel
- Biden’s Policies Unlikely To Cause Crash In U.S. Oil Production
- Oil Prices Move Higher Despite Another Major Crude Build
The first is that with oil remaining the driver of the global economy throughout the 21st century and probably far beyond, Saudi Arabia is the largest and greatest strategic oil reserve for the United States. Therefore, the Biden administration will soon forget about sanctioning Saudi Crown Prince Mohammed bin Salman for his alleged involvement in the murder of Saudi journalist Khashoggi.
The second reason is that Saudi Arabia is the United States’ largest foreign buyer of American weaponry. Saudi Arabia is a cow being milked by US arm manufacturers.
The third reason is that Saudi Arabia can retaliate against the United States in a way that really hurts its economic and geopolitical interests in the Middle East. Saudi Arabia could easily undermine America’s policy towards Iran by reaching some sort of rapprochement with Iran. It can also decide to use the petro-yuan as the currency for its oil trade in place of the petrodollar thus undermining the dollar and the US financial system as much as it did to bring the petrodollar into existence.
The fourth reason is that with both Russia and China making huge inroads into the Middle East, America could ill afford to lose Saudi Arabia.
Saudi oil installations and infrastructure will remain vulnerable to attacks by Iran’s allies, the Houthis of Yemen, as long as the Saudi war continues against Yemen. Therefore, there is a strong motivation for Saudi Arabia to build bridges of trust with Iran.
A successful attack on the Ras Tannura oil terminal, the world’s biggest terminal, could disrupt Saudi oil exports to the world for some time and inflict untold financial damage on the Saudi economy.
And despite President Biden wanting to bring Iran to the negotiating table, this isn’t going to happen without first agreeing to lift the sanction on Iran or at least ease them. Therefore, I don’t expect US sanctions to be lifted soon.
Moreover, Iran has perfected the art of nullifying and evading US sanctions as its foreign minister had boasted recently. Therefore, it might accept a continuation of the sanctions as a small price to pay for ejecting US forces from Iraq and Syria thus achieving a huge geopolitical victory over the United States.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
Delicious! A light at the end of the Dark Tunnel of US dollar reserve imperialism.
But Tehran will not attack the Saudis if Russia doesn't want them to. Nor will they attack Israel because Russia won't let them.
The outcome of all this might just be for the US to stand down and let Russia conduct diplomacy. Putin is the great peacemaker. Moreover, Russia is set to become the hub of giant Eurasian trading bloc from China to Europe, supplying both with energy and natural resources. The EU will get toasted by Klaus Schwab and Putin will eat the toast.
The US will go back to being a republic - rich, free and able to protect itself but not Europe, Japan or Taiwan.
The UK will get a nice consolation prize - English as the common language of international trade.