US and Saudi Arabia: No free rides please!

May 16, 2020 1:23 PM

The US decision to withdraw its protective missile system, of 2 Patriot batteries and 300 personnel, has its own dynamic that gave rise to several theories conspiracy or otherwise.

US saudi arabia ties, donald trump, Patriot missile batteries, Houthis of Yemen, Riyadh, Aramco, saudi crown prince, Jared Kushner,covid 19, US Shale companies The US and the Saudi relationship has been broadly stable and anchored its foreign and security concerns in the region. (Reuters photo)

By Ambassador Anil Trigunayat

Last week President Trump decided to withdraw the Patriot missile batteries from Kingdom of Saudi Arabia (KSA). The system was hastily provided last year when the Saudi oil facilities of Aramco were attacked by drones for which Houthis of Yemen claimed responsibility but Iran, the hidden hand, stood accused given the heightened rivalry both with Washington and Riyadh. It was a rebuff to the Saudis who have taken advantage of being the preferred bet for the Americans in the region at least since the Iranian revolution some four decades ago. Both had very similar regional approaches even if for different reasons. Intransigent nuclear-capable Iran was the main enemy for global and regional power. The new Crown Prince of Saudi Arabia Mohammed bin Salman and President Trump especially his son in law Jared Kushner found a newfound bonhomie that could match the latter’s transactional and a business-like approach. For the Saudis the largest economy of the region broad impact of Arab Spring, global and oil meltdown combined with expensive war with Yemen; blockade of Qatar and infructuous projects elsewhere in the region, as well as arrest of several rich princes, were the first signs of a financially stressed state which finds it difficult to continue to manage its ambitions and frivolous royal enterprise . The oil crisis and COVID 19 have added fuel to fire. Vanity in diplomacy is a double-edged sword.

The US decision to withdraw its protective missile system, of 2 Patriot batteries and 300 personnel, has its own dynamic that gave rise to several theories conspiracy or otherwise. Analysts believe that it was to chastise Saudi Arabia whose intransigent and myopic stance had led to a crash in oil prices. On April 20, US crude futures for the first time since 1946 fell below zero. US Shale companies began to run for cover and were going bankrupt. The US over the years due to its shale oil and gas production is aiming to be the largest producer and is poaching away the markets of traditional producer countries. As such oil prices have been at their lowest ebb for a while stressing the hydrocarbon-based economies globally. Oil glut found no buyers no space for reserves. Russia too had matched the Saudis in negative stroll in mutually destructive syndrome. Consequently, Saudi Arabia not only increased its production but also started giving substantial discounts which caused a bigger crisis under the shadow of COVID 19 which has shut down global industries and economy and hence the demand. For the US it turns out to be not only an economic issue but more of a political one. Trump intervened with Prince Salman and Putin and a 10 mbpd cut was agreed on April 12. Yet the prices did not stabilise or rose to the expectations. As such crude demand has been contracted by at least 30 mbpd which will take a while to recover.

The US and the Saudi relationship has been broadly stable and anchored its foreign and security concerns in the region. Saudis have invested heavily in the US economy and markets. They are the largest importers of US arms and ammunitions and are armed to the teeth with the latest gadgetry. Last big order was placed for US$ 110 bn so for the US arms industry pressure groups from California to Connecticut the Kingdom is a milking cow. But for the oil industry in Texas and elsewhere this oil crisis is perceived as manufactured by the Saudis is unacceptable and unaffordable during the election year. No wonder 13 US Senators tried to browbeat the Saudi Ambassador in Washington and while reportedly repeating some threats said: “This is not how friends treat friends”. It was not a coincidence that complicity and name of a Saudi embassy official in 9/11 bombing of World Trade towers were erroneously released by a former FBI agent only this week. Some others began to talk about Khashoggi murder . Trump also announced that as a punitive measure he will stop imports of Saudi oil and hence some tankers carrying 50mbd or 30 tankers were held back on high seas. He told MBS that he could not stop the congress from invoking ‘The Strained Partnership Act’. Since as such there is no strategic reserve facility available anywhere the Saudis have decided to further cut their crude production by another 1 mbpd to assuage the Americans and markets. As the complete lockdowns are eased and industry starts to pick up the demand contraction for oil will reduce especially in major consumers which should alleviate the concerns to some extent although full recovery is a long way off. Even then as per some estimates OPEC+ had cut daily exports by nearly 6 mbpd during the first half of this month as market treads cautiously.

Another reason advanced, even if farfetched, is that the US no longer has the same level of threat perception to its or Israeli strategic interests from Iran and is not happy with the Saudis and Emiratis not lifting the blockade against Qatar. Although the US continues to threaten Iran with more sanctions the US military offered condolences to Iran over a friendly fire incident in the Islamic Republic when its anti-ship cruise missile killed 19 Iranian troops. US is also not keen that IMF accedes to $ 5 bn request from Iran to meet the COVID contingency. Mixed signals will keep all sides guessing while the US also figures out how to confront and contain China in the west pacific. As such the US has lost appetite to remain the net security provider for the region especially wants its allies to foot the bill. It would rather that they pay for it. Indeed, there is a real danger of the strategic relationship turning transactional. Saudi Arabia and other gulf countries had even agreed to support Trump’s “Deal of the Century” to sort out the Israel-Palestine issue which has already been junked by the Palestinians. But the part of West Bank annexation threat by Netanyahu compelled Secretary Pompeo to dash into Tel Aviv as timing is not really right.

Denying the rumours of a rift with Saudi Arabia and consequent withdrawal of Patriot batteries President Trump said “ We’re doing a lot of things all over the world militarily. We’ve been taken advantage of all over the world. Our military, and in the sense that we’re – and this has nothing to do with Saudi Arabia, this has to do with other countries frankly, much more. We have the most powerful military in the world.” And Pompeo reiterated the same but the message is loud and clear to the Saudis that “America First” is the dictum others need to follow as well. It was during the 2017 Riyadh Summit that the US had agreed to increase the maritime security, military preparedness, sale of high-tech weapons and cybersecurity. But just a few months later in March 2018 speaking to an election rally in Mississippi In an unsavoury manner “I love the king, King Salman, but I said: ‘King, we’re protecting you. You might not be there for two weeks without us. You have to pay for your military, you have to pay.” What to make of such inconsistency and misplaced bravado only he knows. Saudis and others will have no option but to cope up with it.

(The author is Former Ambassador of India to Jordan, Libya & Malta. Views expressed are personal.)

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