Allies or Antagonists: On the Cusp of Redefining U.S.-Saudi Relations

Biden fist bumped the Crown Prince Mohammed bin Salman at Al-Salam Palace in Jeddah, on 15 July, 2022. Photo courtesy of Vinicius Mad. 

On October 5, 2022, the Organization of the Petroleum Exporting Countries (OPEC) in conjunction with Russia announced it was slashing oil production to Western countries. This action exposed a clear schism in the long-standing relationship between the United States and Saudi Arabia, given the latter country’s leading position in the organization. Despite tumultuous disagreements over oil and weaponry, the U.S.-Saudi alliance has always remained relatively stable, rooted in a commonality of interests—namely maintaining peace in the Middle East and possessing a strategic ally in the respective regions. 

The nature of their partnership was solidified as early as 1933: former American president Franklin D. Roosevelt and former Saudi King Abdul Aziz Ibn Saud struck an agreement that provided the U.S. with access to Saudi oil in exchange for military support. This bartering of energy supply for defense capabilities set the terms of a transactional alliance, lending to relative regional stability in the  decades to come. However, with the recent embattled supply chains, a looming recession, higher commodity prices, and the impact of the Ukraine-related energy crisis, a shift in the balance of power is in plain sight. Although tensions have put a strain on the U.S.-Saudi alliance in the past, the recent oil cut spearheaded by the Saudi Kingdom might prove to be the tipping point in an already brittle relationship. Saudi Arabia’s decision to rub shoulders with Russia, after President Biden allegedly struck a secret oil agreement with the Saudi Prince Mohammed bin Salman, represents a severe breach of trust. Now we are left to ponder: will this rupture be repaired, or will it result in an escalation of estrangement?

The current and ongoing tension between Saudi Arabia and the U.S. can be traced from its roots. Since the discovery of oil in the 1930s in the Middle East, this good has become a highly desirable commodity and a strong currency in international power relations. As such, the U.S.-Saudi alliance progressively cultivated mutual growth. Through their relationship with Saudi Arabia, the U.S. gained both privileged access to the Saudi oil supply and a strategic ally in the region, critical to effective American foreign policy in the Middle East. They are working together to maintain stability in the region and maintain a fruitful economic relation. The Saudis, in turn, benefitted from military and financial support. With backing from a superpower, the Saudis could guarantee their security in a complex regional geopolitical reality.  

The strengthening of a bilateral economic relationship between the two nations has paved the way for significant financial interconnections. Saudi Arabia became the biggest market export for the U.S. in the Middle East, providing a myriad of machinery, mechanical appliances and electrical equipment for the country. In addition to fulfilling America’s direct energy needs, Saudi oil played a critical role in U.S. efforts to rebuild European economies in the aftermath of World War II through the Marshall Plan. The Trade and Investment Framework Agreement of 2003 witnessed increased collaboration between the nations while aiming to facilitate business, with the provision of a strategic framework on trade and investment

While the current strain between the U.S.-Saudi relations ostensibly concerns Saudi Arabia’s decision to use its energy resource as an offensive political weapon, the breach has been widening ever since the U.S. favored the creation of a Jewish state back in the 1940s. One of the ways in which the rift has reared its head has been the slashing of oil supplies. 

Traditionally, the reduction of oil production has served as a reliable gauge of Saudi Arabian policy. With the eruption of the Yom Kippur War in 1973, Saudi Arabia placed an oil embargo on the U.S. to protest American involvement in the conflict through the deliverance of weapons and support for Israel. Therefore, to pressure the U.S. to withdraw its support for Israel, the Saudi Kingdom cut off oil production for the first time. The price of gas in the U.S. skyrocketed, causing a massive oil shock and by extension, a consequential financial crisis on an international scale. The hike in oil prices was later stabilized thanks to a peace treaty brokered by the U.S. Secretary of State Henry Kissinger between Israel and Syria. To make amends and remind the Saudis of their initial promise of friendship, the American government has sent an abundance of weapons to the Saudi government from the late 20th century up until today. Nevertheless, notwithstanding the ample supply of weaponry as a symbol of amity, the assassination of Saudi journalist Jamal Khashoggi in 2018 at the Saudi consulate in Istanbul had a destabilizing effect for the U.S.-Saudi relations which led to a 2021 CIA report alleging that the Crown Prince sanctioned the death—a strong signal of disapproval by the Biden administration. In addition, Biden has refused to provide missiles for the Saudis in their war with Yemen and has revoked the designation of “terrorists” placed previously by the Trump administration on Houthi rebels. 

With Russia’s ongoing invasion of Ukraine, the ensuing energy crisis threatens all Western oil-run economies.While Saudi Arabia may have valid reasons, whether political or economic, to curtail oil production matters, their decision to do so in the aftermath of Biden’s state visit will be perceived as a direct snubbing of historic ties. The Biden administration has already made a series of accusations directed at the Saudis about collusion with the Russian government after the cutting off of production. 

Is this simply a challenging period or a point of no return? On the one hand, faced with a substantial gap in oil supply combined with soaring inflation rates, the Biden administration has a responsibility to mitigate the economic means of the oil crisis for their market and their allies. This means  they will need a staunch ally in the Gulf—indeed, Saudi Arabia has a strong hand to play in terms of concessions. Aiming to take on a serious role in global politics, the Saudis have been reasserting their opposing positions and becoming a powerhouse through the Vision 2030 program, which targets the diversification of their economy and the reduction of their dependence on oil. On the other hand, if the United States refuses to act as the security lynchpin for the Saudi Kingdom, who will be able to fill in their shoes? Could they turn to other countries like China or Russia? Or would one of these partnerships further impact its relation to Western countries and tarnish its reputation? 

From the very beginning, the Saudi-U.S. relationship has been purely transactional—presenting both a marriage of convenience and inconvenience. Despite their differences in political systems and divergence in perceptions of human rights, they remain tied by this commonality of interests backed by oil production and export. The United States needs Saudi Arabia in its backyard to promote mutually beneficial global oil policies. Similarly, there is no alternative for Saudi Arabia in terms of security guarantors. The American umbrella seems to be the only option if the Saudis want to preserve stability in the region. It isn’t clear if either nation believes this to be a point of no return, so the two nations will either have to reconcile their differences or find new allies.  

Alexia Pérez is a Staff Writer for CPR and currently a junior pursuing a major in Mathematical Sciences and a minor in History at Barnard.