After Trump Embrace, Saudi Arabia May Find Biden Not So Bad
(Bloomberg) — Under Donald Trump, Saudi Arabia got all the attention it could have wanted from the U.S. — and more. While a Biden presidency looks certain to end the love-fest, the kingdom’s leaders may not mind as much as one might think.King Salman bin Abdulaziz and his son, Crown Prince Mohammed, are set to lose much of what they gained during Trump’s four years in office, including hastily approved weapons sales, the easing of pressure over human rights abuses, and not least a back-channel via the president’s son-in-law, Jared Kushner.But even with an unabashed fan of fossil fuels in the White House, the good times came with something less beneficial: an erratic, sometimes unpredictable U.S. foreign policy in which Washington inflamed tensions with Iran and talked tough but never responded forcefully to cruise-missile strikes on Saudi oil facilities.A Joe Biden administration might seem at first glance like it’s all bad for the world’s largest crude exporter, and for the crown prince who largely runs the country and assumed his role less than a year after Trump took office. Yet while there will certainly be greater scrutiny, especially over human rights, the country may have an opportunity in a U.S. president who isn’t all that different from Trump in regarding Saudi Arabia as a crucial ally in a volatile region.“What Saudi Arabia has wanted is to be seen as a state like any other, to be a leader in the G-20, to have legitimacy,” said Karen Young, a resident scholar at the American Enterprise Institute. “What the Biden administration can offer is to say, ‘OK fine, you want to be treated like any other partner in the Middle East, no more special relationship, let’s lay it all out.’”Oil resetSaudi Arabia will get a fresh chance to burnish its bona fides this weekend when it hosts a virtual summit of the Group of 20 nations. It’s still unclear whether Trump will make a video appearance: The White House has refused to say whether he’ll attend, as the president pushes claims of voter fraud in the Nov. 3 election that he lost to Biden. Trump did join a video conference on Friday for the leaders of Asia-Pacific Economic Cooperation forum member states.In yet one more sign of the Trump administration’s long support for the regime, Secretary of State Michael Pompeo will visit the country’s leaders briefly on Sunday in the futuristic planned city of Neom.Oil has been a key element of the U.S.-Saudi relationship since Franklin Roosevelt met King Abdulaziz Ibn Saud on a warship in the Suez canal in 1945 and the American economy has relied on steady stream of Saudi barrels for decades.The reliance has waned as the shale boom brought America close to energy independence, but Trump still made two major interventions on Saudi oil policy during his presidency. In 2018, when oil was trading near $80 a barrel, Trump asked Riyadh and other OPEC producers to increase production to bring down prices. Then this year, when a price war between Saudi Arabia and Russia crashed prices, Trump intervened to broker a peace deal between President Vladimir Putin and Mohammed bin Salman because he feared tens of thousands of job losses in Texas and other oil-producing states.Climate challengeWhere Trump made no attempt to hide his support for fossil fuels, Biden has said he will rejoin the Paris climate accords as soon as he takes office. His embrace of a climate change agenda is indicative of growing global momentum for an energy transition away from oil and other fossil fuels that is perhaps the greatest challenge for Saudi Arabia’s long-term future.Yet for now, Biden has made clear that Saudi Arabia is a “critical” partner in preserving stability in energy markets and the Middle East. Oil is poised for a third weekly gain, with prices pushing toward the top of a range they’ve held for months.Saudi Arabia already seems to be adjusting to the new political reality. After initially holding off, its leaders sent cables congratulating Biden and seeking warmer ties with the U.S., according to the Saudi Press Agency. King Salman “praised the historical deep-rooted relations between the two friendly countries, adding that both countries are keen to develop and enhance these relations in all fields,” it said.Meanwhile Finance Minister Mohammed Al-Jadaan said in an interview with Bloomberg TV on Friday that Saudi Arabia was a key U.S. ally regardless of “different parties coming into government.”“I am very confident that will continue,” he said.The Biden transition team declined to comment when asked to discuss the president-elect’s approach to Saudi Arabia. But while on the campaign trail, Biden referred to the country as a “pariah” and said he would end support for the war in Yemen, where a Saudi-led coalition has been fighting the Iran-aligned Houthis for more than five years in an effort to restore the internationally recognized government, contributing to one of the world’s worst humanitarian crises.At the same time, Biden has made clear Saudi Arabia’s strategic importance.Keeping Calm“We should recognize the value of cooperation on counter-terrorism and deterring Iran,” Biden told the Council on Foreign Relations in July 2019. “But America needs to insist on responsible Saudi actions and impose consequences for reckless ones.”Such pledges to cooperate have helped keep calm in Saudi Arabia. Officials recognize that it is a less harsh tone than President Barack Obama took, as when he once vented about the “so-called ally” and said Saudi Arabia must “share” the region with Iran.Saudi Arabia’s leadership is also assuaged by Biden’s past comments that while he wants to rejoin the Iran nuclear deal that Trump abandoned, he also wants follow-on negotiations to strengthen the deal. Saudi Arabia regards Iran as its chief regional foe, and opposed the 2015 nuclear accord between Iran and world powers.The kingdom’s economic and political importance to the Muslim world rules out any major change in relations, according to Mohammed Alsulami, head of Rasanah, an Iran-focused think tank based in Riyadh.Turkey critics“You cannot ignore that,” he said. “Maybe you will talk more about human rights issues — maybe Yemen more — but not more than that.”For the Saudis, there is also the matter of the Trump administration’s dependability. Saudi Arabia’s trust in the Trump team was shaken last year after the president responded with harsh words but no action when missiles and drones launched from Iran hit a Saudi oil field and the world’s biggest crude-processing facility in Abqaiq.The kingdom is also aware that a Biden administration might be tougher on Turkey, a Saudi rival, whereas Trump largely held off criticism of President Recep Tayyip Erdogan.“Given the fact that we’re weaning ourselves off Arab hydrocarbon, Biden can pursue a different approach,” said Aaron David Miller, a senior fellow at the Carnegie Endowment for International Peace and former Mideast official at the State Department. At the same time, he said, the Biden administration will want to make sure Saudi Arabia sees a smooth transition of its own should King Salman, who is now 84, formally transfer power to the crown prince.“The real equity with Saudi is making sure the place remains stable and survives,” he said.(Updates with oil considerations starting in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.