US ties with Middle East allies have frayed; China benefits
MON, MAR 28, 2022
Leon Hadar
For several days, the White House has been trying to arrange phone calls between President Joe Biden and Saudi Arabia's Crown Prince Mohammed bin Salman (aka MBS) and with Crown Prince Sheikh Mohammed bin Zayed Al Nahyan of the United Arab Emirates (UAE), the leaders of the two powerful oil-producing Arab Gulf states. But no one was picking up the call on the other side.
The reason for the US president's call had to do with, well, oil. Since Russia began its invasion of Ukraine, oil prices have been surging. So President Biden wanted the help of two long-time Middle East allies in getting gas prices back down by having them pump more oil.
On one level, this miscommunication between Washington and Riyadh and Abu Dhabi reflects growing resentment over what the Arab leaders regard as the cold shoulder they have been receiving from an America that seems to be retreating from the Middle East.
But on another level, the deterioration in the relationship between the Americans and their Arab allies could not only damage US strategic and economic interests in the Middle East. It could also affect its global position as Saudi Arabia, and the UAE and other Middle Eastern countries, including Israel and Turkey, diversify their diplomatic portfolio and strengthen their ties with America's global rivals, China and Russia.
The relationship between the US and Saudi Arabia has evolved since 1945 on the basis of self-interests. The Saudis have provided the US and its Western allies with access to oil and helped stabilise global energy prices. The US has built its military bases in the Arab Gulf states and has been Saudi Arabia's top security ally in the Middle East, and a major economic partner.
That partnership has been facing some challenges in recent years as America was becoming more energy independent and its military interventions in the Middle East, including in Iraq and Afghanistan, were less cost effective than in the past, leading Washington to reassess its military commitments in the region.
Moreover, against the backdrop of growing tensions in the Middle East between a Shiite axis led by Iran and an Arab-Sunni bloc headed by Saudi Arabia, the Saudis and their allies were worried that they could not rely on the Americans to defend them against the Islamic Republic. Those concerns were heightened when the administration of President Barack Obama signed a deal with Iran, the Joint Comprehensive Plan of Action (JCPOA) that America's Arab allies as well as Israel believed would not halt Iran's nuclear military programme and allow it to continue threatening them and destabilising the Middle East.
But those sentiments seemed to change after Donald Trump became president. Making his first trip abroad to Saudi Arabia and Israel, he proclaimed US commitment to defend the two countries from Iranian aggression, including the Islamic Republic's support for the anti-Saudi Houthis rebels in Yemen and anti-Israeli Hezbollah group in Lebanon. Then came President Trump's decision to annul the nuclear deal with Iran, followed by the imposition of punishing economic sanctions aka "maximum pressure" on Iran aimed at forcing it to change it behaviour.
At the same time, President Trump and his foreign policy aides encouraged the Israelis and the Gulf Arab states to strengthen their intelligence and military ties as part of an effort to form a regional bloc to contain Iran. That process led eventually to the signing of the Abraham Accord between Israel, the UAE and Bahrain in August 2020 on the White House lawn.
But this strategy seemed to change when President Biden entered the White House. One of his administration's first foreign-policy actions was to end US support for the Saudi war against the Iran-backed Houthis in Yemen, and to remove the terrorist designation from them. Yet despite President Biden's gesture, the Houthis ended up sending drones and missiles to attack the oil fields and cities of Saudi Arabia and the UAE.
Moreover, reflecting his commitment to promoting human rights and under pressure from his party's progressive wing, and blaming MBS for the 2018 murder of journalist Jamal Khashoggi, President Biden pledged to distance the US from Saudi Arabia, and turn it into a global "pariah".
Under MBS the Saudis have actually taken steps to liberalise their political system. But that did not impress President Biden. "We were going to, in fact, make them pay the price and make them, in fact, the pariah that they are," he said. "There's very little social redeeming value in the present government in Saudi Arabia." Ouch!
Topping it all was the Biden administration's insistence on renewing the nuclear deal with Iran and removing the sanctions on it. The move, as seen in Riyadh and Jerusalem, would allow the Islamic Republic to gain access to billions of dollars giving it resources to finance proxy wars in the region without placing restrictions on the development of cruise missiles that could target the Arab Gulf states and the Jewish State. At the same time, the US pulled Patriot anti-aircraft missile systems that were supposed to protect Saudi installations from drone and missile attacks.
With the US shifting its attention from the Middle East towards East Asia and China, it was not surprising that the Saudis and their allies in the Gulf were beginning to lose faith in the Biden administration. They were certainly not ready to do favours to a president who referred to them as "pariah" and was planning to release military and economic pressure on their deadliest rival, Iran.
Why, indeed, should the Saudis pump more oil and in the process break production agreements already made with other big oil producers, in order to help the Biden administration with its campaign of economic sanctions against Russia, whose government has maintained a friendly relationship with the Saudis?
In fact, while declining to return President Biden's phone calls, Prince Mohammed and Sheikh Mohammed did take recent calls from Russian President Putin. Ouch!
And while the Saudis' relationship with the US has been deteriorating, Riyadh has been deepening its ties with another global power, China, that happens to be Saudi Arabia's biggest oil customer, buying about a quarter of the kingdom's oil, and that like Russia, does not criticise their human rights policies.
Not returning President Biden's phone calls may have been an insult to Washington. But according to the Wall Street Journal, the Saudis are now considering delivering a major blow to the Americans, by accepting the Chinese yuan instead of US dollars for Chinese oil sales.
Since Saudi Arabia struck a deal with the US in 1974, the kingdom has required all of its oil customers to use US dollars. Changing that policy by using the Chinese currency, instead of the dollar, for China oil would be a major win for the Chinese, who are keen to boost the use of the yuan as a global currency.
From that perspective, by allowing China to pay for its oil in yuan, the Saudis would be helping challenge the dominance of the US dollar as the reserve currency, perhaps even convincing other countries to pay for their oil in their own currencies. In the long run, reducing the incentives to hold US dollars would weaken the US currency and reduce the dominance of the US financial system.
The Saudis probably recognise that China would not be able to replace the US as their key security partner. But like other Middle Eastern governments, they are not sure that the Americans are willing to continue playing that role. The same reason that has driven their alliance with the US for several decades explains their growing ties with China: Self-interests.
The Arab Gulf states certainly do not share the Biden administration's goal of expanding liberal democratic values and standing up to autocrats, and while Washington regards China and Russia as the main threats to their national security, the Saudis and the Israelis insist that their major challenge is Iran.
The Biden administration would have to take all of that into consideration as Washington reassesses its Mideast policy in the context of its global strategy in terms of priorities, and recognise that promoting democracy and challenging autocrats are the last items of the agendas of its partners in the Middle East.