Kennan’s Warning on Ukraine
Ambition, Insecurity, and the Perils of Independence
In October 2022, Saudi Arabia announced that OPEC+, a group of oil-exporting countries, would cut oil production targets substantially: by two million barrels per day. As the world’s top exporter of oil, the Saudis have always taken the lead in the group’s efforts to manage the world oil market. The move had an immediate if relatively modest impact on oil prices, which rose from a low for the year of around $76 per barrel before the announcement to a range of about $82 to $91 by mid-November. The shock felt by Americans was more geopolitical than economic: the Biden administration had asked Saudi Arabia to delay the cut. But Riyadh went ahead with it anyway, snubbing Washington.
The resulting recriminations between Washington and Riyadh have called into question the future of the bilateral relationship. In response to the OPEC+ decision, the Biden administration announced that it would reevaluate its relationship with Saudi Arabia and said the cuts “would increase Russian revenues and blunt the effectiveness of sanctions” introduced in response to Russia’s invasion of Ukraine. Robert Menendez, a Democratic senator from New Jersey, vowed to block arms sales to Saudi Arabia. Several members of Congress introduced a bill mandating the removal of U.S. troops from the kingdom. Riyadh refused to backtrack, saying the OPEC+ decision was unanimous and based “purely on economic reasons.”
In the intervening months, tempers on both sides have cooled, and it seems unlikely that the Biden administration’s promised reevaluation of ties with Saudi Arabia will lead to a major change. U.S.-Saudi relations have weathered worse crises. And in November 2022, the Biden administration granted sovereign immunity to Saudi Crown Prince Mohammed bin Salman, known as MBS, on the basis of his role as Saudi Arabia’s prime minister, in a U.S. civil case brought against him by the fiancée of Jamal Khashoggi, a journalist murdered at the hands of Saudi operatives. The immunity is one sign, among many others, that the U.S.-Saudi relationship is not headed for rupture. But the OPEC+ imbroglio and its aftermath signal the arrival of a new phase in the relationship. For the first time since the mid-twentieth century, when the relationship began, Riyadh is not on board with Washington’s grand strategy.
Analysts and observers of U.S.-Saudi affairs tend to focus on individuals and their agendas. MBS is headstrong and authoritarian, seeking to remake Saudi Arabia’s economy and elevate his country’s role as an independent global player. U.S. President Joe Biden, by contrast, has a more cautious style and wants to make democracy a centerpiece of his foreign policy, rallying the world against Russia and China. This gap between the two men’s personalities and goals is no doubt important in shaping their countries’ relations. But to paraphrase Karl Marx in one of his more lucid moments, individuals make history, but not necessarily in any way they choose. The OPEC+ controversy points to three important changes in the bilateral relationship that go beyond personalities and will have more lasting consequences than the actions and reactions of any decision-makers.
First, the global balance of power has shifted. Washington’s relative influence is waning as the international order becomes multipolar, making moderately powerful countries such as Saudi Arabia more likely to hedge their bets and less likely to throw in their lot with just one great power. Second, as climate change pushes the world away from fossil fuels, Saudi Arabia is under pressure to cash in on its oil reserves while it still can—a sense of urgency that is coloring its approach to production and pricing. Third, like almost every issue of significance in American politics, the question of U.S. relations with Saudi Arabia has become intensely polarized along partisan lines in the United States, in no small part because the Saudis themselves have made their preference for Republicans clear.
The grand strategic overlap that for decades defined the U.S.-Saudi relationship no longer exists. But the prospects for cooperation on a relatively narrow set of regional and economic issues remain good, if both sides understand these shifts so they can reach a more realistic set of mutual expectations.
Saudi Arabia became important to the United States after World War II, a conflict that highlighted the central role that oil would play in modern military strategy and economic development. Since then, the world has experienced three periods in the distribution of global power. In the first, the Cold War, Saudi Arabia had little choice but to support the United States’ geopolitical goals. After all, it could not rely on security and economic assistance from the Soviet Union, which backed many of Riyadh’s regional rivals and espoused a revolutionary communist ideology antithetical to the conservative Islamic basis of Saudi rule. At the time, decisions about Saudi oil production remained in the hands of the American oil companies that developed the Saudi oil industry in the 1950s and 1960s. Riyadh did not have the power to deal with Moscow on questions of oil, even if it wanted to.
The United States and Saudi Arabia were also an ideological odd couple. Shared enemies and complementary economic needs made them partners by default; common interests substituted for common values. The one exception to their alignment was the Arab-Israeli conflict. Their divergence on that issue led to the biggest crisis in the bilateral relationship’s history: the oil embargo of 1973–74, when in response to U.S. support for Israel in the Yom Kippur War, Saudi Arabia and five other Arab countries briefly reduced the production of oil and stopped shipping it to the United States. The disruption led to panic buying, a quadrupling of oil prices, and a profound shift in power relations within the oil market. Producer countries such as Saudi Arabia now called the shots; the American companies that had run the Saudi oil industry became the junior partners and service providers to the Saudi government.
Saudi policy directly damaged the American economy, and Washington threatened military intervention. The crisis was quickly averted after American diplomacy ended the war and led negotiations that culminated in the Egyptian-Israeli peace treaty of 1979. Washington and Riyadh’s common strategic goals in the Cold War, including minimizing Soviet influence in the Middle East, helped to heal the breach between the two capitals. In the years that followed, as oil became an ever more salient issue for U.S. policymakers, maintaining good relations with the Saudis became an increasingly important bipartisan goal. Cooperation grew during the 1980s, as the two countries jointly aided the Afghans and foreign fighters resisting the Soviet occupation of Afghanistan, and reached its peak during the Gulf War of 1990–91, which coincided with the end of the Cold War and demonstrated the utility of the bilateral relationship to both sides.
The second period was that of U.S. unipolarity, which stretched from the collapse of the Soviet Union to sometime in the 2010s. In this era, the United States was the only option for countries such as Saudi Arabia that sought to partner with a great power. During this period, another great crisis occurred: the 9/11 attacks, which were planned by Osama bin Laden, a scion of one of Saudi Arabia’s wealthiest families, and perpetrated by 15 Saudis (out of a total of 19 hijackers). Since al Qaeda targeted the Saudi ruling family as well as the United States, however, the two countries once again found that a common enemy could bring them together. During the subsequent “war on terror,” U.S. Presidents George W. Bush and Barack Obama both nurtured close intelligence relations with Saudi Arabia. Washington was the only game in town, and Riyadh backed U.S. initiatives even when the kingdom publicly questioned their wisdom, most notably during the 2003 invasion of Iraq.
The end of the Cold War and the dawn of Pax Americana were relatively sudden and involved a series of dramatic events. The end of the unipolar moment, by contrast, took place gradually. Yet by 2020, the squandering of U.S. assets and credibility in Iraq and Afghanistan, the growth of dysfunction and polarization in American domestic politics, the rise of China, and Russia’s attempted comeback as a great power had all combined to create a new international balance of forces. Unlike in the two previous periods, in the third, no common enemy cements U.S.-Saudi relations. The Biden administration seeks to rally international coalitions against Russia and China, but Saudi Arabia sees neither of those great powers as enemies. China is now its largest oil customer and trade partner. Trade between Saudi Arabia and China increased from less than $500 million in 1990 to $87 billion in 2021. That same year, the value of Saudi exports to China, overwhelmingly oil and petroleum products, was more than three times greater than Saudi exports to the United States and nearly double those to India and Japan, the second and third largest Saudi export targets. Russia is Saudi Arabia’s necessary (although occasionally difficult) partner in the management of the world oil market. OPEC+ countries produce roughly 40 million barrels of oil per day; Saudi Arabia and Russia combined account for over half that number. Only if Moscow and Riyadh are on the same page can OPEC+ decisions have an impact on the market.
For all those reasons, when Saudi leaders survey the geopolitical landscape, the picture they see differs markedly from the one their American counterparts see. For Washington elites that had become accustomed to almost guaranteed Saudi support for the United States, this new reality is a shock, which is why some politicians reacted hysterically to the OPEC+ decision. These reactions are not merely about oil prices in the run-up to a midterm election. Saudi Arabia and the United States have disagreed plenty in the past about oil prices. The difference this time around is the geopolitical context—especially the war in Ukraine, which the Biden administration has defined as a historic inflection point that will determine the future of world order. For Saudi Arabia, as for many other countries, including India and Israel, it is simply a regional war.
Meanwhile, the Saudis have their own complaints. The past three U.S. presidents have campaigned on the premise that the United States needs to spend less time and effort on the Middle East. This is not comforting to a Saudi regime that sees Iran, which has expanded its influence in Iraq, Lebanon, Syria, and Yemen, as a serious regional threat. The stated purpose of the United States’ focus on the Persian Gulf region for the past 70 years has been to protect the free flow of oil. But when Iran launched a missile and drone attack on Saudi oil facilities in September 2019—the most serious assault on the free flow of oil since the Iraqi dictator Saddam Hussein set Kuwait’s oil fields on fire in 1991—the Trump administration did nothing, despite the close relations it had fostered with Riyadh.
The kingdom is no longer an automatic partner to the United States. The cozy strategic relationship of earlier eras isn’t coming back. But more limited cooperation is possible, even if domestic politics on both sides continue to present difficulties.
Although Saudi Arabia always prefers higher oil prices than U.S. presidents would like, the kingdom used to occasionally accede to Washington’s requests to increase supply and get more oil on the market, normally in the run-up to U.S. elections. But in October 2022, Washington’s pleas went unheeded.
From Riyadh’s perspective, the kingdom must exploit its last chance to cash in before the oil era ends. That is the assumption behind the crown prince’s ambitious Vision 2030 economic restructuring plan—to create a more diversified Saudi economy before the world market for oil craters under the pressure of climate change, the move to alternative fuels, and other technological changes. That will not happen for years. But the crown prince needs all the leverage he can get to invest in non-oil sectors of the Saudi economy and to buffer his population from the painful consequences of necessary reforms, such as the reduction of substantial subsidies for public utilities, including water and electricity, and the introduction of a 15 percent value-added tax on consumer purchases.
That explains why Saudi oil policy is aimed at maintaining prices at a level that can fund MBS’s ambitious plans and still sustain a steady level of global demand. Those imperatives will not always match up with the United States’ electoral calendar. With less overlap between Washington’s grand strategy and Riyadh’s foreign policy concerns, the Saudi leadership is less likely than in the past to do U.S. presidents any electoral favors when it comes to oil.
If the important changes affecting the bilateral relationship on the Saudi side are about political economy, the domestic American changes are about partisan politics. U.S.-Saudi ties, like so many other issues, have been drawn into the vortex of the partisan polarization of U.S. politics. In the past, relations with Saudi Arabia had little support among the general public, but whoever was in the White House wanted to have good relations with the world’s largest oil exporter. That began to change during the administration of U.S. President Donald Trump.
Saudi Arabia is no longer an automatic partner to the United States.
Trump made no secret of his affection for the Saudis, and MBS in particular. In an unprecedented step, he made Riyadh the first foreign capital he visited. He bragged about, and exaggerated, the arms sales he negotiated with the kingdom. In a risky move, Trump publicly hinted his support of MBS as the prince outmaneuvered his cousin Mohammad bin Nayef, the main interlocutor of previous U.S. administrations, and removed him from power in 2017. Historically, U.S. presidents have not publicly involved themselves, even indirectly, in palace politics. Trump equivocated about MBS’s complicity in the murder of Khashoggi, even in the face of substantial evidence that the crime was carried out at the crown prince’s direction. (“It could very well be that the crown prince had knowledge of this tragic event—maybe he did and maybe he didn’t!” Trump said.) Trump’s son-in-law and senior adviser, Jared Kushner, developed a direct relationship, outside normal diplomatic channels, with the crown prince. After leaving office, Kushner and Steven Mnuchin, who served as treasury secretary under Trump, both received substantial investments from the Saudi sovereign wealth fund for their private equity ventures. And this past November, Trump’s company agreed to license the Trump name to a multibillion-dollar luxury housing and golf complex being developed in Oman by a major Saudi real estate firm.
To the Democratic foreign policy establishment, it seemed as if the Saudis had chosen sides, and its stance tracked accordingly. The Khashoggi killing and Saudi involvement in Yemen’s civil war came under steady Democratic criticism. During the campaign for the Democratic presidential nomination in 2020, Biden called Saudi Arabia “a pariah.” This was shockingly harsh language from a former U.S. vice president and senator who had dealt with the Saudis for decades and had always been a reliable indicator of conventional wisdom on foreign policy within the Democratic Party.
When the Biden administration came into office, it put into practice the disdain for Saudi Arabia the president had expressed during the campaign. Biden refused to speak with the crown prince and authorized the release of a CIA report that held him responsible for Khashoggi’s death. Washington limited its support for the Saudi war effort in Yemen and withdrew Patriot antiaircraft missiles from the kingdom, even as Saudi Arabia faced missile attacks from the Houthis in Yemen.
The war in Ukraine and the subsequent surge in oil prices caused the administration to reconsider. Isolating the Saudis was feasible during the drop in world oil demand during the COVID-19 pandemic. But when the United States tried to cut off Russian oil exports as the world economy and oil demand began to recover, Washington needed Saudi Arabia. Riyadh was one of the few actors that could pump more oil immediately. Yet Biden’s trip to Saudi Arabia accomplished little and generated even more bad feelings. The Saudis resented the U.S. contention that Biden had come not to meet the crown prince but rather to attend a multilateral meeting with the Gulf Cooperation Council states. The two sides feuded in public over whether Biden brought up the Khashoggi case during a private conversation with MBS; Biden said he had, and the Saudis said he had not. A meeting meant to smooth relations only ruffled them further.
Biden has handled the relationship clumsily, but the Saudis are hardly without fault. The murder of Khashoggi was, of course, an unforgivable crime. And the Saudis were far too public in their embrace of Trump, from their lavish welcome at the outset of his presidency to their participation in his and his family’s business ventures since his 2020 defeat. In the end, Trump did not even act to defend the kingdom when Iran attacked Saudi oil facilities in 2019. Even so, the Saudi leadership seems to have concluded that it cannot get a fair hearing from Democrats and can only hope that Republicans return to power. When the Saudis rebuffed the Biden administration’s request to delay the OPEC+ production cut until after the midterm elections, it strengthened the sense that Riyadh did not want to do Democrats any favors. The United States’ relationships with foreign countries cannot be sustained by only one party. Such partisan polarization poses the greatest threat to the U.S.-Saudi relationship.
For those who believe that U.S. foreign policy should privilege human rights and shun fossil fuels, the fraying U.S.-Saudi relationship poses no problem. But even the Biden administration, which entered office happy to distance itself from Riyadh, quickly came around to the need for a working relationship with the world’s largest oil exporter. No matter how committed the United States is to adopting clean energy, oil will be needed during the transition. No matter how badly Americans want to pivot away from the Middle East, Washington has geopolitical commitments in the region that draw the United States back in: keeping Iran from obtaining nuclear weapons, preventing a resurgence of jihadism, maintaining regional stability to reduce refugee pressures on Europe, and sustaining the relationship with Israel. If oil and the Middle East remain even marginally important for U.S. interests, a working relationship with Saudi Arabia is necessary.
Step one in sustaining such a relationship is to recognize how it has changed. The days when Saudi Arabia would automatically side with the United States on grand strategic issues are gone; for the Saudis, China and Russia now loom larger than ever. That does not mean that Riyadh will work against the United States at the global level. It just means that the Saudis will consider issues case by case. That will require the United States to take an open and consultative approach, maintaining channels of communication to convince the Saudis of common interests on global issues. Keeping Riyadh at arm’s length is not the way to keep it on Washington’s side.
On the big issues in the Middle East, Washington and Riyadh are not that far apart. The traditional stumbling block, the close U.S.-Israeli relationship, is no longer an obstacle, thanks to warming Saudi-Israeli relations. The Saudis are increasingly willing to work with Israel, even if they are not yet ready to follow Bahrain, Morocco, Sudan, and the United Arab Emirates into the so-called Abraham Accords, through which those countries have normalized their relations with Israel.
Another point of tension with Riyadh that suddenly seems less salient is Washington’s effort to curtail Iran’s nuclear activities through diplomacy, which the Saudis worried would entail concessions to Iran that would solidify Tehran’s regional influence. It seems likely that efforts to revive the Iran nuclear deal, which Trump pulled out of in 2018, will fail. Washington will inevitably have to find a new policy to deter or prevent Iran from obtaining nuclear weapons while also limiting or rolling back Iranian influence in the region. Saudi Arabia has the same interest.
Democrats should not isolate MBS or work around him.
Although terrorism is not at the top of the agenda today, the United States still has an interest in preventing a resurgence of Salafi jihadism, extremism fueled by a revolutionary and violent interpretation of Islam, as represented by al Qaeda, the Islamic State (also known as ISIS), and other groups. Under MBS, Saudi Arabia has not only opposed those groups in the region but has also reduced the influence of the Salafi religious establishment in the kingdom. When Saudi Arabia encourages a more tolerant and open interpretation of Islam, it undercuts the appeal of Salafi jihadism.
Despite their differences over oil prices, the two countries’ economic interests still overlap in important ways. They share an interest in maintaining the dominance of the U.S. dollar. Riyadh prices its oil in dollars, which buttresses the dollar’s role as the world’s reserve currency because oil consumers must have dollars on hand to fund their energy needs. Unfriendly oil producers such as Iran, Venezuela, and Russia occasionally push to conduct transactions in alternative currencies. Saudi Arabia has always resisted such overtures, because anything that damages the dollar’s centrality reduces the value of Saudi Arabia’s dollar-denominated assets, which is significant given the volume of Saudi financial assets in U.S. markets, including substantial holdings of U.S. government debt, and investments in U.S. companies.
Finally, it is in the interest of both the United States and Saudi Arabia to continue to cooperate on military and intelligence issues. For Saudi Arabia, neither China nor Russia can provide the level of security cooperation that the United States can. Only Washington can project substantial military power into the Persian Gulf region, as demonstrated during the Gulf War of 1990–91. And the United States benefits from cooperation, too. Saudi arms purchases reduce the unit costs of U.S. arms production and link the two states’ militaries, fostering long-term partnership. With the likely failure of the nuclear talks with Tehran, the chance of a confrontation between the United States and Iran grows. Cooperation with Saudi Arabia on military contingencies increases the military efficiency of the United States in the region, thereby deterring Iran.
Little can be done to reverse the shift in the global balance of power or to ease the pressure Riyadh feels to cash in on oil. But both the United States and Saudi Arabia can bolster bilateral ties if each side reconsiders how it views the other’s domestic politics. The Saudis must jettison the self-defeating belief that one of the United States’ political parties is against them and the other is for them. Efforts to influence U.S. politics in favor of one party are bound to fail in the long-term since in a two-party system, the out party always eventually becomes the governing one. Riyadh needs to make a major effort to convince Washington’s Democratic establishment that it seeks good relations with the United States, and not just with Republicans. That means, as a beginning, resisting the siren calls of Trump world to assist in its 2024 restoration, either through indirect financial support or policy moves aimed at weakening the Biden administration. It also means that Saudi Arabia should make overtures to the kingdom’s Democratic critics in Washington. Their minds might not be changed, but their fears about Saudi interference in U.S. domestic politics could be assuaged.
On the U.S. side, Democrats should accept the fact that MBS will very likely be the next king of Saudi Arabia and will rule for a long time. It makes no sense to try to isolate him or work around him. This might be distasteful for advocates of human rights, but if U.S. diplomats and officials can deal with Russian President Vladimir Putin, Chinese President Xi Jinping, and the representatives of the Islamic Republic of Iran and many other governments that violate the human rights of their citizens and others, they can certainly meet with MBS.
Indeed, in the new global configuration, Washington will have to meet with Riyadh more often, convincing the kingdom to see things its way. U.S. Secretary of State Antony Blinken has visited Saudi Arabia only once, during Biden’s July 2022 trip to the kingdom. The Saudi-American Strategic Dialogue has not been held for two years. Saudis notice these things.
The elements of continued cooperation between the United States and Saudi Arabia are still in place. But the two countries must set aside their unrealistic dreams of changing or influencing the other’s domestic politics. Both sides must learn to deal with the other side as it is—not as they wish it to be.