A more self-assertive Saudi Arabia is taking steps to amplify its role on the global stage, at times in defiance of its U.S. partner. What does this mean for global energy markets and the future of U.S.-Saudi relations?
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DonateThe world is in the midst of multiple contested transitions in the composition of global energy, the global balance of political power, and the very nature of the global system. Front and center is Russia’s invasion of Ukraine, and the U.S. response: a great-power contest defining the limits – if any – on territorial expansion and testing the strength and steadfastness of the transatlantic democratic coalition, in good measure through energy-based economic warfare. The contest cuts through domestic politics as well, with partisanship coloring views on how far to press Russia, the value of democratic partners and practice, and the reasons behind the United States’ current energy predicament.
The Saudi leadership sure knows how to choose its moment.
The decision of the OPEC+ alliance of OPEC and non-OPEC members to cut oil production – effectively undercutting Europe’s upcoming sanctions on Russia and tightening oil stocks only weeks in advance of the U.S. midterm elections – hit these contested touchstones with uncanny precision.
Saudi officials have asserted that this was a collective decision among OPEC partners, that it was a technical decision based on market conditions and was calculated to serve Saudi interests, not those of Russia. There are elements of timing and countermessaging that cast doubt on the first two contentions. As for interests, the context of the decision is all important. This die was cast after a nearly yearlong effort by the administration of President Joseph R. Biden Jr. to bring Saudi and U.S. positions toward regional and energy security into alignment. That outreach failed. This Saudi decision was not calibrated to consider the collective interests of the coalition confronting Russia.
Instead, the Saudi announcement of production cuts felt, as a colleague quipped with mischievous exaggeration, akin to former Egyptian President Gamal Abdel Nasser standing down the British at Suez. It was a Saudi declaration of independence – an assertion of Saudi power on the global stage amid the kingdom’s ongoing efforts to redefine itself through its foreign policy. That policy has changed along with Saudi Arabia itself, displaying a more nationalist bent and projecting a new global appeal less constrained by U.S. concerns.
Saudi Arabia is an undisputed heavyweight in global energy markets. So, it is unsurprising that Crown Prince and Prime Minister Mohammed bin Salman would choose that arena to assert Saudi power. Historically, however, this has been done within institutional procedures and personnel that emphasized the collective and technocratic nature of decisions. That framework has been abandoned in favor of a more direct approach.
Since King Salman bin Abdulaziz took power in 2015, there has been a steady centralization of oil policy, with Mohammed bin Salman at its helm. Days after coming to power, King Salman streamlined economic decision making through the establishment of the Council of Economic and Development Affairs, handing his son the presidency and thus full authority over the economy. Only a few months later, Mohammed bin Salman was given dominion over the direction of oil policy through his chairmanship over the newly established 10-member supreme council of Aramco.
In September 2019, Mohammed bin Salman’s half-brother, Prince Abdulaziz bin Salman, became the first royal to hold the post of energy minister following the removal of Khalid al-Falih. At the same time, the chairmanship of Saudi Aramco was handed over to Yasir al-Rumayyan, the Mohammed bin Salman confidant already heading the powerful Public Investment Fund. All of these changes are indicative of the consolidation of energy policy within the royal court and in service of the ambitious Vision 2030 developmental agenda championed by the crown prince.
Similarly, both OPEC and OPEC+ have been advanced in ways that leverage Saudi power and bring it to the forefront. The appointment of Prince Abdulaziz makes Mohammed bin Salman’s half-brother the public face of oil diplomacy, much as his full brother Khalid bin Salman now fronts defense policy. The recent selection of Kuwaiti Haitham al-Ghais as OPEC secretary general installed the Saudi-backed candidate in the position. And the very institutions of the OPEC+ arrangement ensconce Saudi Arabia and Russia as the final arbiters of oil quotas. A showdown between the two partners over timing and market share in March 2020 during the early days of the coronavirus pandemic crashed oil prices but effectively demonstrated Saudi Arabia’s unmatched influence over this critical global commodity.
This centralization of decision making and demonstration of power has enhanced Mohammed bin Salman’s and Saudi Arabia’s control over the oil markets and the revenue stream so critical to the kingdom’s transition. The demands of an ambitious economic diversification agenda and an impending energy transition that marks the inexorable demise in the dominance of hydrocarbon-based energy sources both drive the Saudi need for higher oil prices. But this greater directness has also surrendered the formalities and institutional diplomacy that once insulated the kingdom and its leadership from suspicion of personalizing and politicizing oil markets.
Saudi Arabia’s global reorientation and Mohammed bin Salman’s new ambitions are apparent in more than energy markets and oil policy. At the recent Future Investment Initiative, the Saudis demonstrated their economic power and aspirations, convening 6,000 investors, businesspeople, and government officials under the tagline “Enabling A New Global Order.” While Biden administration officials were not present, U.S. CEOs were. Indeed, the ability of Saudi Arabia to attract foreign capital, talent, and visitors is critical to its future prospects, a reality well understood by Saudi diplomats, such as the Saudi ambassador to the United States, Princess Reema bint Bandar al-Saud, who frequently stresses the desire to move the relationship beyond oil and security. The attendees looking for business opportunities in the world’s fastest-growing economy found their Saudi hosts in a buoyant mood.
The country that once rejected a long-fought-for seat on the United Nations Security Council now looks to convey this economic power into an enhanced diplomatic presence. This is exemplified by the Saudi presidency of the G-20 in 2020. While this moment to place Riyadh on the global stage at the G-20 summit that November was thwarted by the coronavirus pandemic, which forced the meeting online, the Saudis still forged connections steering the working groups for this global membership representing 80% of the world’s economic output.
Saudi leaders are still calibrating their strategy as they expand their reach beyond their traditional leadership within the Arab and Islamic world, and open distance, at times defiantly, from the U.S. geopolitical bloc. At the recent U.N. General Assembly meetings, Saudi Foreign Minister Faisal bin Farhan decried the dangers of geopolitical polarization and convened with middle powers to discuss how to insulate themselves from the negative effects of this division and conflicts like the one over Ukraine. Reports that Saudi Arabia has explored joining the BRICS bloc (comprised of Brazil, Russia, India, China, and South Africa) is evidence of the appeal of these unaligned emerging powers for the kingdom.
Mediation is another way to reflect influence and independence. During the General Assembly meetings, the Saudis announced the release of 10 foreign fighters, including two Americans, detained by Russia into their custody – a feat achieved by their close ties to Moscow. Further, their engagement on the fertilizer shortage caused by the Ukraine war serves to cultivate ties to developing countries.
Underlying the new Saudi foreign policy direction is the new Saudi nationalism. This derives from many sources: the shift from Islamic legitimacy to a nationalist appeal; the need to popularly engage – and employ – a young Saudi population; and the ambition of the young Saudi leader. The “Saudi-first” approach is unmistakable in op-eds and on social media, and it colors Saudi policies such as the OPEC+ production cut decision. Saudi Energy Minister Prince Abdulaziz drew sustained applause at the Future Investment Initiative by dismissing the United States’ expectation of support with the sharp retort: “I keep listening, are you with us or against us? Is there any room for, ‘We are for Saudi Arabia and for the people of Saudi Arabia?’”
This defiance resonates, drawing approval across Arab and unaligned camps, especially in an anti-colonial moment when demonstrating the capacity to stand up to the United States and make it count has an unmistakable appeal. And there is no denying the affinity between this nationalist stance and the “America-first” nationalism expressed by the wing of the Republican Party aligned with former President Donald J. Trump. In contrast, the disdain for the Democrats and the Biden administration is palpable, expressed in numerous Saudi op-eds and revealed through unnamed government officials sourced in Western media. At times, this dismissiveness has been stated by Mohammed bin Salman directly.
This partisanship is amplified by social media. As Saudi-first media influencers have observed and engaged directly in the back and forth of U.S. polemical discourse, an alignment has been created between the harsh Republican criticism of Democrats and the talking points adopted by Saudis themselves. The Saudi government has further courted this convergence by directing people-to-people outreach through U.S. talk radio, which skews right wing.
To some extent, this growing alignment with the Republican Party is based on policy. While administrations of both parties have contributed to doubts about the United States’ staying power in the Middle East, it is the Democrats who have sponsored the negotiations in pursuit of a nuclear agreement with Iran, expressed greater urgency in moving away from hydrocarbons, and championed a green economy. And while criticism of Saudi Arabia in Congress has been bipartisan, the Democrats have been the most persistent in calling out human rights abuses and proactive in demanding consequences.
There are contradictions in the overall Saudi project. Most apparent is the continued Saudi reliance on the United States for its security. This would recommend more strategic patience and coordination across the broader energy-security partnership, but this is hard to manage with an ambitious and impatient Saudi leadership and a long-standing U.S. sense of seniority with expectations of compliance.
The current dynamics of the energy partnership likewise are set on a dynamic of more conflict as states increasingly undertake strategic interventions in markets. Russia has already set a precedent of weaponizing the gas sector. Vulnerable consuming states have tools to intervene in markets to protect themselves, and Europe and the United States are using them (and using sanctions as well, as a weapon against Russia’s economic interests, including oil and gas exports). The Strategic Petroleum Reserve release, oil sanctions, and waivers offered through price caps on Russian oil are reactions to the current Ukraine war, but they are also signs of the future. This understandably makes oil exporting states, especially a Saudi leadership eager to press its leverage in energy markets, anxious.
The appetite for higher oil prices also cuts against the more populist appeals of the new Saudi foreign policy. Consuming countries in the developing world are most affected by the inflationary pressures and threat of global recession. The coordination by the United States and the Gulf Cooperation Council members states plus Egypt, Jordan, and Iraq at a summit in Jeddah in July to support food security for the Middle East and North Africa was a positive step to address this dilemma, but there are also contests to appoint blame for high inflation in the competing narratives of “high dollar” versus “high oil price.”
The more populist undertones in the Saudi rhetoric also belie the direction of the Saudi reform project, which, with its technology cities and high-end tourism, clearly appeals to the global elite. Indeed, the Saudi-first political posture is wed to a broader Saudi ambition to belatedly join full force the cosmopolitan hubs for arts and technology, which the previous leadership, septuagenarian and wedded to a restrictive Islamic order, prevented. While attendance at the Future Investment Initiative was impressive, it has not yet been tested and translated into the broad commitment of dollars and movement of people required to make the kingdom’s diversification agenda a success. The attraction of global talent, global visitors, and global investment to fuel Saudi Arabia’s new cities and tourist sites are less likely to be realized in an environment of standoff and conflict.
In her first televised interview with international media since she became ambassador to the United States, Princess Reema told CNN: “We are a young population, and we have a young leadership. We have an aspiration and a goal to engage with the world in a way we never did before. This kingdom is not the kingdom it was five years ago. It is not the kingdom it was 10 years ago. Every piece of analysis that existed is no longer relevant.”
The new direction in Saudi foreign policy derives from a more popular and youth-centered political base. To meet their youthful ambitions – much like the Emiratis – the Saudis are building new multilateral forums that they can shape to their own objectives. And they are expanding bilateral ties, especially in the East where economic markets are growing. These provide points of leverage to pry more from the U.S. relationship.
But this becomes more difficult in today’s polarized environment, where loyalty is expected from security partners on issues seen as existential or fundamental to the global security order. These tensions are widespread in the current moment when the U.S.-led international order is fraying, and middle powers are driving their own agendas.
is a senior resident scholar at the Arab Gulf States Institute in Washington.
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