Aramco’s Diversification Strategy: Fueling Saudi Arabia’s Vision 2030
Aramco’s journey reflects not just the shift in Saudi energy policy but a broader reimagining of what national oil companies can achieve on the global stage.
Various economic, security, and political interests are driving the tripartite alliance, and it is likely to boost each country’s regional role over the long term.
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DonateMuch has been said about President Joseph R. Biden Jr.’s recent visit to the Middle East. Many experts focused on the trip’s implications for the U.S.-Saudi partnership, which they suggested had reached “its lowest point” in many years. Nevertheless, only a few commented on what the July Jeddah summit means for the Egypt-Iraq-Jordan alliance.
Biden met separately with the leaders of the three countries. In his meeting with Jordan’s King Abdullah II, Biden described the alliance as “an example of positive regional collaboration.” During his meeting with Iraqi Prime Minister Mustafa al-Kadhimi, the U.S. president also praised the ties among the three countries and reconfirmed Washington’s support for the alliance.
Egypt’s relations with Jordan and Iraq have witnessed periods of tensions, particularly in the 1950s during the “Arab Cold War.” Yet in 1989, Egypt, Iraq, and Jordan, along with then what was North Yemen, declared the formation of the Arab Cooperation Council. The council, however, collapsed after Saddam Hussein’s invasion of Kuwait in 1990. The current alliance bears some similarity with the Arab Cooperation Council, particularly in its focus on diplomacy and economic development over military cooperation.
In recent years, there have been various mutual interests that have brought Egypt, Iraq, and Jordan closer. With their alliance, the three countries’ primary aim is to increase economic cooperation. All three are in a difficult economic position, so they hope that enhanced cooperation will provide continuous economic support for each of them rather than intermittent help.
The tripartite alliance also aims to collaborate on counterterrorism. The Islamic State in Iraq and the Levant still poses a threat to the three countries. In Iraq, ISIL has launched several attacks this year. ISIL has also conducted recent attacks in Sinai, which has been an epicenter of violence for Islamist militants in Egypt over the past decade. In Jordan, security forces thwarted an ISIL plot to attack a government building in Irbid in March 2021. “Iraqi-Jordanian cooperation against the Islamic State is very strong, and the relationship between the two intelligence services is deep-rooted,” Michael Knights, a senior fellow at The Washington Institute for Near East Policy specializing in the military and security affairs of Iraq, Iran, Yemen, and the Gulf Arab states, stated in an email interview. “Iraqi and Jordanian intelligence operators have often known each other all their careers, and it has helped that Iraq’s prime minister Mustapha Kadhimi was the intelligence chief and led intelligence diplomacy with both the Jordanians and the Egyptians. Iraqi and Jordanian forces train together regularly at the King Abdullah special forces academy in Jordan. And Iraqi forces regularly discover intelligence that is useful to the Jordanians and the Egyptians, especially regarding Sinai cells.” Although ISIL has been defeated militarily, the group still has active sleeper cells. Closer security cooperation within the alliance would boost the three countries’ efforts to combat terrorism.
Some experts also argue that the alliance seeks to work as a front against Tehran’s and Ankara’s interference in the Arab world. During a visit to Washington in July 2021, King Abdullah urged Biden to back Kadhimi’s attempts to reduce Baghdad’s reliance on Tehran. The countries also aim to link their power grids so that Jordan and Egypt can begin to supply electricity to Iraq by the start of 2023, in efforts to reduce Iraq’s need for electricity from Iran. The three countries’ concerns vary regarding the non-Arab regional powers’ approaches, and the alliance at this stage does not have sufficient influence to reduce Iran’s and Turkey’s leverage in the region. “The three-way economic coalition is too ambitious and remains in an embryonic state. Each member has multifaceted domestic challenges as the last few days have proved in the case of Iraq,” Osama al-Sharif, a veteran journalist and political commentator based in Amman wrote in an email interview. “So I don’t think the alliance will undercut the growing influence of Iran and Turkey in the region.”
The three countries explicitly seek good ties with the Gulf Corporation Council states. In fact, Sharif noted that the alliance invited the UAE to join, acknowledging the leading regional role Abu Dhabi is seeking. While he pointed out that there hasn’t been anything official about the UAE joining the alliance, “it is clear that the four countries are clustering together.”
For many years, Jordan has had close ties with the GCC states. Yet its ties with Saudi Arabia have seemingly cooled in recent years. Jordan did not cut off diplomatic ties with Doha after the Saudi- and Emirati-led boycott of Qatar in 2017, and Amman withdrew its support for the Saudi-led coalition in Yemen, which frustrated the Saudis. While such events did not result in an overt rift between Amman and Riyadh, these tensions prompted a reduction in aid and delays in investments from Saudi Arabia, a stance that has left its mark on a Jordanian economy dependent on such external infusions. Reports have also hinted at Saudi involvement in what appeared to be an attempted coup in Jordan in 2021.
Nevertheless, there have been recent signs of an improvement in Saudi-Jordanian relations, though the rapprochement is still likely to be a cautious one. In June, as part of a regional tour, Saudi Crown Prince Mohammed bin Salman visited Jordan and expressed his keenness “to push relations to a new phase.” Curtis Ryan, a professor of political science at Appalachian State University, noted that he believes Mohammed bin Salman’s visit and Saudi Arabia’s invitation to Jordan to attend the Jeddah summit “made the thaw in Saudi-Jordanian relations official.” Ryan, who is the author of “Jordan and the Arab Uprisings: Regime Survival and Politics Beyond the State,” explained in an email interview, “The bilateral relationship wasn’t hostile before, and Jordan has relied on influxes of Saudi aid and investment fairly often. But relations had at times been cool – something the Jordanian side definitely wanted to fix. So I think this marks a new and warmer period in Saudi-Jordanian relations, one that allows Jordan to deepen its alignment with Egypt and Iraq (also a Jordanian priority) without alienating Saudi Arabia or other Gulf partners and allies.”
For the Jordanian government, an improvement in ties with Saudi Arabia and potential strengthening of economic cooperation could ease concerns as Jordan deals with an increasingly fragile economy. While the country has started recovering from the effects of the coronavirus, around half of the country’s youth are unemployed. The public debt is another challenge, which has increased from $18.9 billion in 2011 to $40 billion. In August, the government increased fuel prices for a fifth time this year, under pressure from the International Monetary Fund to adhere to an economic reform program, placing increasing stains on Jordanian citizens. One factor straining Jordan’s economy over recent years has been regional conflicts, particularly the Syrian civil war, as the country has taken in nearly 1.4 million Syrian refugees.
Saudi leaders, meanwhile, may be changing their posture toward Jordan as a response to moves by the Biden administration. During the administration of former President Donald J. Trump, Amman felt its regional role was marginalized. The main area of disagreement between Amman and the Trump administration seemed to be regarding the Israeli-Palestinian conflict. After the Palestinians, Jordan would have been the first victim of Trump’s peace plan for the decadeslong conflict. If implemented, the plan would have been disastrous for the two-state solution, leaving Jordan to deal with serious long-term challenges. The plan also did not mention Jordan’s role as the custodian of the Islamic and Christian holy sites in Jerusalem, which is a source of the monarchy’s legitimacy. Meanwhile, Jordan seemed to be one of the few regional countries that celebrated Biden’s election victory. King Abdullah was the first Arab leader to meet Biden at the White House. Riyadh may find it pertinent to strengthen ties with Amman, as Jordan has seemingly been elevated in terms of relevance and importance by the Biden administration.
Saudi Arabia and Jordan also share concerns about Iran. The nature of relations of each country with Iran differs, as does its threat level. However, Jordan wants to keep Iranian-allied militias in Syria far from its borders. In July, King Abdullah told Al Rai newspaper, “Iranian interference is reaching several Arab states, and today we are facing regular attacks on our borders by militias linked to Iran.” He added, “We therefore hope to see a change in the behavior of Iran. It has to be realized on the ground.”
Iraq’s relationship with the GCC states soured after Saddam Hussein’s 1990 invasion of Kuwait, and Saudi Arabia was particularly slow to engage with the Iraqis. Washington encouraged the Saudis to reengage with Iraq as part of an attempt to contain Tehran’s leverage in the region. Riyadh, however, tended to see Iraq as loyal to Iran, primarily because of the Shia majority’s rise to power following the fall of Saddam. However, under King Salman bin Abdulaziz, Saudi Arabia has been increasingly opening toward Iraq. In 2017, then-Saudi Foreign Minister Adel al-Jubeir visited Iraq – the first visit of its kind by a Saudi foreign minister since 1990. In 2019, Saudi Arabia pledged a $1 billion aid package for the country, and in 2021 Saudi Arabia and Iraq agreed to create a $3 billion joint fund. In July, Saudi Arabia allocated a grant to renovate a hospital in Baghdad. In addition to economic support for the government, the Saudis have also reached out to Iraqi tribes and prominent Shia figures.
Former U.S. Ambassador Gary Grappo, who served from 2009-10 as minister counselor for political affairs at the U.S. Embassy in Baghdad, wrote in an email interview that the crown prince and Saudi leadership “see things differently today and have become much more active in Iraq,” noting that the Saudis “definitely want to be players” in the country. Moreover, Saudi Arabia’s invitation to Iraq to join the Jeddah summit acknowledged Iraq’s growing regional role. Since April 2021, for instance, the Iraqis have been hosting Saudi-Iranian talks in Baghdad. Since Kadhimi became prime minister, Saudi-Iraqi ties have notably improved, as the deepening of ties with Riyadh has been a key foreign policy objective for him. However, as relations are not yet on solid ground, such efforts could be stalled if Kadhimi leaves office.
Ties between Saudi Arabia and Egypt, meanwhile, have been relatively strong over the past decade. However, Riyadh and Cairo have diverged on some issues over recent years, particularly regarding Syria and Iran. The Saudis and Emiratis have steadfastly backed President Abdel Fattah al-Sisi and have provided billions of dollars in aid to Egypt since he took power. Middle East expert Gregory Aftandilian wrote in an email interview, “I do not think the recent Jeddah summit changed much between Cairo and Riyadh because relations overall have been close since Sisi came to power.” Aftandilian, the author of “Egypt’s Bid for Arab Leadership: Implications for U.S. Policy,” added, “The Jeddah summit also came after the Saudis pledged over $10 billion in aid and investments in Egypt since the spring of 2022 when Egypt faced new fiscal crises stemming in part from the Russian invasion of Ukraine, which led to higher food and subsidy costs in Egypt. On the other hand, there seems to be more coordination between the Egyptian and Saudi navies in patrolling the Red Sea in recent months.”
The alliance has both economic and political goals. If it remains intact, it is likely to boost Iraq’s, Jordan’s, and Egypt’s regional roles over the long term. It will be interesting to see, however, the extent to which the alliance will be independent from the GCC. All three countries seek solid ties with GCC states, which suggests the coalition is willing to work next to the Gulf bloc rather than in competition with it. Likewise, it is not clear yet how this alignment could marshal much effort to push back against non-Arab regional powers. For the alliance, this could be tricky for at least two reasons.
First, Iran still has substantial influence over Iraq. Second, both Jordan and Egypt have peace treaties with Israel, another non-Arab regional power. This could partly explain why, although Amman and Cairo may not be enthusiastic supporters of the Abraham Accords, they are still likely to be cautious about their public reactions, particularly as they do not wish to negatively impact their ties with the United States, which brokered the peace deals. It is also important that within the alliance, the three countries’ concerns about Iran or Turkey are not identical. The Egyptians, for instance, seem to feel more threatened by Turkey than Iran. In the foreseeable future, what seems most likely are incremental diplomatic improvements among the three countries, with continued efforts bilaterally and trilaterally to strengthen relations with Riyadh and Abu Dhabi. Notably, the three-way coalition – as Ryan puts it – “is not a new and powerful alliance in the traditional sense of a formal defense pact. Rather, it is mainly a looser bloc aiming for cooperation on security, diplomacy, and economic relations.” Thus, Saudi Arabia and the UAE are likely to remain for the foreseeable future the powers behind regional dynamics in the Arab world.
is a British Arab writer and researcher who focuses on the Middle East and North Africa. He tweets as @AZ_Kilani.
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