US plays nice despite Saudis flexing oil power

The Biden administration is touting improved relations with Saudi Arabia since tensions spiked ahead of last year’s election, but there’s no sign of U.S. progress in convincing Riyadh to lower global gas prices.

Following a surprise meeting with Saudi Crown Prince Mohammed bin Salman this week, Secretary of State Antony Blinken reported warming relations since October, when Biden ultimately held back on a promise to impose “consequences” on Saudi Arabia after the Kingdom cut oil production. 

“We had a difference in views in October over the OPEC+ decision, but I think what we’re seeing is an increasing convergence in our partnership to advance in issues of mutual interest to Saudi Arabia, to the United States, and, for that matter, to countries in the region and beyond,” Blinken said in a Thursday interview with Arabic media in Riyadh.

Oil revenues remain the bulk of Riyadh’s wealth as the 37-year-old crown prince, the de-facto ruler and heir apparent to the kingdom, seeks to remake Saudi Arabia as a center of business, culture and leisure in the Middle East. 

Riyadh’s refusal to find common ground with America’s energy interests — despite a high-profile visit by President Biden last year and billions in weapons sales — has compounded unease over the kingdom’s chilling human rights record. 

But even some of Biden’s allies in Congress are giving up on the potential for consequences. 

“I’m kind of giving up that we’re going to be able to dramatically change our assistance to Saudi Arabia and Egypt in a way that telegraphs to the world, and to the region, that we care in the way that we spend money on human rights,” Sen. Chris Murphy (D-Conn.), said in frustration during a budget hearing in late May.

The Biden administration appears to have come to the strategic decision to compartmentalize areas where the U.S. and Saudis have shared interests. That includes making progress on ending Yemen’s devastating, eight-year civil war; supporting the kingdom’s communication with Iran to calm tensions in the region; setting up a breakthrough in ties with Israel; and using Riyadh’s help and influence to roll back an outbreak of war in Sudan.

The U.S. is also intent on keeping Saudi Arabia and Crown Prince Mohammed in its sphere of influence even as the kingdom balances its ties with Russia and China. 

Tellingly, the administration has treaded carefully around Saudi Arabia’s recent announcement that it intends to make deep cuts to its oil output for July. 

While gas prices peaked in the wake of Russia’s invasion of Ukraine, those prices have gone down, giving the administration some domestic breathing room — for now. Gas prices are down from a year ago, at nearly $3.60, but have incrementally increased from last month, according to AAA. 

“You’ve heard us say this before: We believe that supply should meet demand. And we’ll continue to work with all producers and consumers to ensure that energy markets support economic growth and lower prices for American families,” State Department deputy spokesperson Vedant Patel said Monday. 

The Saudis argue that decisions made in the OPEC+ group of top oil-producing nations are based strictly on economic factors and the global market. 

But in private, the crown prince reportedly threatened to blow up the relationship with the U.S. and attack the American economy in retaliation for Biden’s comments that there would be consequences for cutting oil production, the Washington Post reported on Friday, citing an intelligence analysis revealed in a wide-ranging leak of classified documents. 

High oil prices and increased oil production have contributed to a boom for the Saudi economy, the International Monetary Fund wrote in a recent summary of the country’s economic status. 

That has bankrolled increased investments in so-called “giga projects” — large-scale business ventures targeting entertainment, culture and technology the kingdom is pursuing to diversify its economy away from oil. This includes a surprise deal to merge the PGA Golf tour with the Saudi-funded LIV Golf tour and the crown prince’s determination to realize a $500 billion futuristic city in the desert. 

“It seems to me the Saudis have a genuine challenge figuring out how to manage the oil market,” said Jon Alterman, the director of the CSIS Middle East Program. “They want to get a sweet spot between revenues that help finance their investments internally — their economic transition, essentially — and not have prices so high that it makes alternative energy much more economical.”

The Biden administration appears to be swallowing the Saudi’s reasoning on its oil decisions to avoid blowing up the relationship entirely, in particular as they see Riyadh make genuine progress in pushing forward a resolution in Yemen and after the Kingdom was indispensable in helping people flee Sudan when civil war broke out in the country’s capital in late April.  

Barbara Leaf, assistant secretary of State for the Bureau of Near Eastern Affairs, told a Senate Foreign Relations subcommittee that Saudi Arabia’s pursuit of their “socio-economic modernization project” is a primary driver of their push for easing tensions in the region, particularly with Iran and in efforts to pursue peace in Yemen. 

“The Saudis were really determined — since last fall — to use a bilateral channel that they had opened up to drive to an end to their engagement in the Yemen conflict, and indeed to drive to an end of the conflict itself. They did not want the Iranians to scupper that.”

The Biden administration has taken pains to appeal to the Saudis and the crown prince to move beyond Biden calling out the Saudi royal as a pariah for his role in the 2018 killing of Jamal Khashoggi, the former palace insider turned critic and columnist for the Washington Post. 

The White House notably this week didn’t comment on the PGA Tour and LIV golf merger while 9/11 victims’ families and some Democrats on Capitol Hill quickly bashed the U.S. golf league for caving to the Saudis.

“I don’t think making the Saudis cry uncle is especially interesting. I think trying to figure out how to engage with important partners who are looking to do something different and think the world is moving in a different direction, that’s interesting,” Alterman of CSIS said.

Eric Ueland, the undersecretary of State for civilian security, democracy and human rights under former President Trump, said Biden’s pariah comments during the 2020 election have proven to be a major geopolitical mistake. 

“In a situation where the president went out of his way to be offensive to the Saudis prior to his election and then has failed in his effort to set a better relationship with the Kingdom since he’s sworn in, the idea that Secretary [Blinken] and the United States is now in a situation where over and over again — by virtue of those choices the Biden administration made — it’s now a supplicant to the Kingdom,” he said.

Biden’s now-infamous fist bump with Crown Prince Mohammed last July during a meeting in Jeddah was an attempt to signal the relationship was moving on. 

These events have upset Biden supporters who are focused on human rights. 

The fist-bump “was just really this visceral visual welcoming of a full international rehabilitation of, quite frankly, one of the most brutal dictators in the world,” Tess McEnery, former human rights director on Biden’s National Security Council, said in a briefing with reporters hosted by the Project on Middle East Democracy, where she is executive director. 

“I think it’s very evident that the administration needs to abandon its behind closed doors approach to addressing human rights. There need to be clear public costs to MBS’S repression.”