Saudi Crown Prince Mohammed bin Salman (MBS) has been a busy man over the last several weeks.
On March 10, Saudi Arabia signed an agreement with its chief regional adversary, Iran, to re-establish diplomatic relations, re-open embassies and begin laying the groundwork for additional talks on more substantive disagreements. Weeks later, reports emerged that Saudi officials were in discussions with the Syrian government to normalize ties. Then, on March 29, Saudis agreed to join the China-led Shanghai Cooperation Organization (SCO) as a so-called dialogue partner, a step toward becoming a full member. Finally, the Saudi-led Organization of Petroleum Exporting Countries (OPEC) announced another crude oil production cut last weekend, taking a little more than 1 million barrels a day off the market to support prices that dipped to a 15-month low of almost $70 a barrel.
Most of these actions received less than ideal responses from the United States, arguably the kingdom's most important foreign partner. The White House National Security Council condemned Riyadh's second oil output cut in six months, with a spokesperson telling Newsweek that, "We don't think cuts are advisable at this moment given market uncertainty—and we've made that clear." Riyadh's move toward the China-led grouping isn't necessarily a big deal in the grand scheme (the SCO doesn't pack much of a geopolitical punch), but it's nonetheless indicative of Saudi Arabia broadening its strategic relationships and putting its eggs in multiple baskets.
Analysts and commentators in Washington aren't taking kindly to the latest Saudi decisions. There is an ingrained feeling that Riyadh is purposely taking actions to rile the U.S. or make President Joe Biden look feckless. There could be something to that; MBS and President Biden have a terrible personal relationship, view one another as irritants, and have different interpretations of where the global oil market should be. MBS hasn't forgotten about Biden's branding of the kingdom as a "pariah" state during the 2020 presidential campaign; Biden hasn't forgotten about MBS' culpability in the murder of The Washington Post columnist Jamal Khashoggi.
Animus toward the U.S., however, is only one factor—and it's highly unlikely to be the biggest one.
Take the recent oil production cut. It's easy to see why higher oil prices could be construed as a low-blow at the U.S. Nobody likes to pay more at the gas pump, especially when so many Americans are experiencing financial strain, cost-of-living issues, and higher than average inflation. It's easy to see why the Biden administration would be upset about the production decrease as well; higher fuel costs aren't great for the president's approval ratings or for the president's party.
Yet for the Saudis, slowing down the rate of production makes perfect sense. Tighter markets mean higher prices, which translate into bigger margins and fatter budgets. Last year, Aramco, the Saudi state oil giant, registered a record $161.1 billion in income, a 46 percent increase from the prior year. The Saudis aren't sitting on those funds, but rather using them to finance massive "gigaprojects" like new cities, resorts, roads, and infrastructure. Neom, the futuristic tech city that is one of MBS' pet projects, costs an estimated $500 billion—and this is only a single project on the crown prince's wish-list. Revamping an entire economy from a petro-state to a technology and resort hub isn't cheap. The Saudis need all the money they can get if they have a chance of accomplishing this and collecting petro-dollars is the fastest way to do it.
Making peace, or at least trying to, with adversaries like Iran and Syria is also sensical from the Saudi perspective. If the name of the game is persuading foreign investors to hinge their futures on the Saudi economy, then it's incumbent to convince those same investors that the kingdom is stable enough to do business. Just like an investor wouldn't finance a project on the verge of bankruptcy, an investor is unlikely to send billions of dollars into a region prone to conflict. Iranian drones or cruise missiles slamming into oil facilities isn't good for business. Yasmine Farouk of the Carnegie Endowment for International Peace was right when she observed that confrontational relations with Iran would "dash Saudi dreams of becoming a regional and global hub especially for cloud computing, logistics, trade, and industry."
Improving the relationship with China doesn't hurt either. While the U.S. isn't openly opposed to closer Saudi-China ties and is careful not to force Riyadh into a position where it has to choose between Washington and Beijing, senior U.S. defense officials have warned the Saudis (as well as other countries in the Persian Gulf) that there are limits to U.S. support if the relationship with China "crosses a certain threshold."
Saudi Arabia, though, doesn't seem to care. The outlook has much to do with the royal family's current leadership dynamics, but it's also motivated by what Tim Sweijs and Michael J. Mazarr said is a general trend of middle powers becoming more ambitious and confident of their role in the international system. The Saudis don't want to be beholden to the U.S. any more than they want to be beholden to Beijing, Moscow, or any other foreign power. What the Saudis want above all else is maximum opportunity and as much as leverage as possible. If those goals are best accomplished by leaning in China's direction, then MBS will do so. If they are best accomplished by leaning in Washington's direction, then so much the better.
U.S. officials shouldn't brush off the Saudi entreaties to Beijing as nothingburgers. But they shouldn't exaggerate them or extrapolate the wrong lessons either. It's a mistake to assume Saudi Arabia is now in China's pocket just as it would be a mistake to treat Saudi Arabia as a U.S. treaty ally.
Daniel R. DePetris is a fellow at Defense Priorities and a syndicated foreign affairs columnist at the Chicago Tribune.
The views expressed in this article are the writer's own.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
