May 12, 2023 | Washington Examiner

A new foundation for the US-Saudi partnership

May 12, 2023 | Washington Examiner

A new foundation for the US-Saudi partnership

Once a bastion of Western influence in the Persian Gulf, Saudi Arabia may be shifting its allegiance toward the East. Tired of Washington’s wavering support, the Saudis are warming to China. Still, it is not clear Beijing can replace Washington.

For half a century, the special relationship between Washington and Riyadh has rested on an arrangement whereby the United States protects Saudi Arabia from foreign threats while the Saudis protect the Americans from instability in world oil markets. However, as the U.S. inches closer to energy independence, its reliance on Saudi oil has diminished. Their original arrangement now seems less relevant. Yet Washington still has substantial influence over Riyadh that it can leverage to keep the kingdom out of China’s orbit.

While the U.S. now produces more oil than ever, China’s voracious appetite for energy resources has only grown, and the Saudis have been more than willing to oblige. A Chinese proverb advises, “When you drink water, remember the source.” This also applies to oil, and Beijing is eager to show that it has greater influence over that source than Washington.

While becoming the largest importer of Saudi crude, China’s presence in the Saudi economy has also grown rapidly. It has become a major supplier of goods, from textiles and consumer products to heavy machinery. In 2022, trade in goods between the two countries reached $116 billion, $78 billion of which was Saudi’s exports to China. Meanwhile, the trade in goods between the U.S. and Saudi Arabia stood at $35 billion in 2022.

The crown jewels of Washington’s leverage are the years of Saudi dependence on U.S. military hardware, software, and training. A break with Washington would immediately render Riyadh far less secure. When it comes to intelligence, Riyadh has also relied on Washington’s assistance (though, when it comes to counterterrorism against groups like al Qaeda and ISIS, the Saudis have been critical). Furthermore, a lot of Saudi money is tied up in American firms. To reshape its economy and move beyond oil exports, the Saudis need American technology and innovation. Add to this Washington’s position as the hub of international financial networks, as well as its soft power and diplomatic heft.

America’s special relationship with Saudi Arabia may be in a coma, but it does not mean Washington cannot redefine its relationship with the Saudis to keep Riyadh in its orbit. Beijing simply cannot offer what Washington does, even if it can sometimes embarrass the U.S. with diplomatic moves like brokering a Saudi-Iranian detente. In the wake of that setback, the right move for Washington is to modernize its relationship with Riyadh, not write it off as a Chinese vassal.

Dr. Saeed Ghasseminejad is a senior Iran and financial economics adviser at the Foundation for Defense of Democracies, specializing in Iran’s economy and financial markets, sanctions, and illicit finance. Follow him on Twitter @SGhasseminejad. FDD is a Washington, DC-based, non-partisan research institute focusing on national security and foreign policy.

Issues:

Iran Iran Global Threat Network Iran Politics and Economy Iran Sanctions Iran-backed Terrorism Israel Military and Political Power U.S. Defense Policy and Strategy