02.09.2015 Author: Viktor Mikhin

Saudi Arabia is strengthening its foreign policy

64563333The report about King of Saudi Arabia, Salman bin Abdulaziz Al Saud’s upcoming visit to the United States immediately caused a flurry of commentary, analysis, simple speculation, hypotheses and conjectures in the world media. So far, this is just the first so-called ripple of information. Political figures are now frantically trying to make sense of the reported visit and its potential impact on world developments.

The main question is: will there be a reconciliation between the two leaders, and will Washington unequivocally defend Riyadh from all enemies as it has done in the past, and will the Saudis diligently play along with the Americans in terms of world politics? Or, will King Salman be told that owing to the USA’s development of shale oil, they are no longer interested in Saudi’s “black gold” as previously, and their interest is increasingly drifting towards Iran.

At present, as the events show, the Saudi king and his entourage are deeply disappointed by Washington’s deviation from their previous strategic course, which has bound both countries together for 70 years – and where Riyadh has always played the role of errand boy for the Americans. We should recall that on February 14, 1945, a historical meeting took place aboard the U.S. Navy ship USS Quincy in the Suez Canal. U.S. President Franklin Roosevelt signed an agreement with Saudi Arabia’s King Abdulaziz ibn Abdul Rahman ibn Faisal Al Saud (Ibn Saud). According to this agreement, the U.S. guaranteed continued support for the Saudi royal family and the Aramco Oil Company, while they would provide an uninterrupted supply of the “black gold”. These relationships have been maintained almost until the last day, despite many ups and downs in connection with the Israeli-Palestinian conflict and other conflicts in the region. But now, Washington has gradually begun to withdraw its unconditional support of Riyadh and the reasons are numerous.

The main reason, primarily, concerns oil which makes it very serious indeed. The current day guru of American foreign policy, the former Secretary of State, Henry Kissinger, and Zbigniew Brzezinski both previously announced that if there is to be a third world war, then it will be in the Persian Gulf over oil. And this was the reality of the situation. The Americans, after establishing excellent relations with Riyadh almost completely abandoned their oil-wells, preferring to get its “black gold” cheap from abroad.

But times have changed and new technology has been developed allowing America to do away with its former energy dependence. Thus, the US energy imports have almost halved for the last decade, and continue to plummet. The reduced US dependence on oil supplies can be explained for the most part by the increased domestic production brought about by the development of shale oil and gas fields. For example, in early 2013 the volume of US production exceeded 7 million barrels per day, with an annual growth of 20%. In 2014, according to data from BPstats ( Statistical Review of World Energy 2015BP 10 June 2015) production reached 11.644 million barrels per day (3rd place in the world) and according to data from EIA, Independent Statistic and Analysis Agency of the USA, it had reached 13.974 million barrels (putting the USA in first place.)

In the near future, in 2017-2020, the United States is set to firmly secure its leading position in the world in oil production, leaving Saudi Arabia and Russia behind. What’s more, after a short while they will even be able to start exporting hydrocarbons themselves. This new set-up means that Washington will no longer consider the oil monarchies of the Persian Gulf as important energy suppliers, who play a key role in meeting its energy needs, but primarily as potential competitors and at best as “fat cats”, who are willing to buy up large amounts of US arms for vast sums of money.

Therefore, the global demand for oil from Saudi Arabia is in continual decline. This is stated in an open letter from the Saudi Prince Al-Waleed bin Talal, addressed to the Saudi Arabian Minister of Petroleum and Mineral Resources, Ali al-Naimi. In the letter, the King’s nephew, Prince Al-Waleed, expressed his concern about the fact that 92% of the state budget depends on income from oil. The letter published in the pan-Arab Al-Hayat newspaper states that “the world’s dependence on OPEC oil, especially that of Saudi Arabia, is clearly and continuously declining.” The Prince added that the threat from shale gas is “only increasing” and pointed out the recent progress made in this field by North America and Australia. “Income diversification is a must, and this requires a clear vision, which is to be implemented immediately,” said Al-Waleed. He also called on the Saudi authorities to prepare a development plan for nuclear energy and the creation of renewable energy sources in order to “reduce the local oil consumption as fast as possible.”

Incidentally, according to IMF experts, the real GDP growth in Saudi Arabia this year is expected to slow to 2.8%, and in 2016 it will drop to 2.4%, because the government will have to cut expenditure in proportion to the fall in prices. It is unlikely that this is possible, thus the budget deficit this year could reach 19.5% of GDP. Earlier predictions put the deficit at 5% of GDP. In 2014, at oil prices of $100 per barrel, Saudi Arabia earned $631 million a day, whereas now the same volume will only provide revenue of $340 million a day. Analysts, interviewed by the Financial Times, are saying the deficit is at $130bn in 2015.

In turn, the United States has given up its former penchant for diving headlong into new Middle Eastern military campaigns without regard for anyone, not even the UN, and is no longer set on getting involved as the perennial conflicts in Iraq and Afghanistan proved to be highly costly and didn’t bring about great dividends after the strategy changed. Curtailing the plans to reorganise the Middle East will inevitably lead to a total destabilisation of the region. Washington understands this perfectly, as Tom Donilon, National Security Advisor to the White House, once announced. He noted that Washington has permanent national security interests in this region, alluding to the War on Terror, Israeli security and its “historically stabilizing role as a defender of partners and allies in the Middle East.” And, additionally, there is the outlined course to improve relations with Tehran, although there are a large number of opponents of this process in Washington. The Washington Post, writing on this topic, revealed that President Barack Obama said that if the US Congress votes against the deal on Iran’s nuclear program, it is highly likely that military action will commence against Tehran.

King Salman’s upcoming visit to the USA has rather clearly highlighted Riyadh’s foreign policy priorities. After all, some time ago there were rumours that the Saudi king might visit the MAKS 2015 Air Show, along with the leaders of other Arab countries. It was then, however, clearly stated that the visit would only take place at the end of this year. Thus, no matter what the relations with the United States are like, King Salman wants to visit Washington first and foremost and to normalize relations with the current “policeman of the world”. Apparently, he is going to succeed to some extent. We should not forget that there are still some large American bases on Saudi territory, where there are several thousand US troops plus 3,000 advisers and trainers in the Saudi army. According to SIPRI (Stockholm International Peace Research Institute), the weapons and military equipment, used in the Saudi army are 90% American. According to data, also from the Stockholm Institute, since the signing of the agreement between Roosevelt and Ibn Saud, over $600 billion worth of American arms have been delivered to Saudi Arabia. These are only the official figures, but there were also secret deliveries made by the United States Department of the Interior (DOI) and Intelligence services.

Thus, King Salman bin Abdulaziz Al Saud’s visit to Russia will be on “a needs must basis” and its results, we can already safely say, will depend directly on what the Saudi guest achieves during talks with US President Barack Obama. If, however, we take into account that Washington will improve the current state of affairs between the two countries anyway, as Congress and the Jewish lobby actively advocate, the Saudi King will hold talks in Moscow mainly on economic and military matters. First and foremost, it concerns the question of building some nuclear power plants on Saudi territory and the purchase of a small number of Russian weapons to show willingness. It is hardly worth counting on a rapprochement on the subject of Syria where Saudi Arabia and Qatar generously sponsored the “insurgents”, in other words, the terrorist organization, whose aim was to overthrow the lawfully elected President Bashar al-Assad by military means. A compromise on the issue of Yemen is unlikely to be found, based on the fact that a few days ago Riyadh led ground troops onto the territory of its neighbouring state, continuing lawlessness and tyranny with no peace negotiations, only brute military force. We should not expect a consensus on Iran, which, according to the Saudi rulers, are currently their number one enemy. For example, Riyadh holds a very dim view of the upcoming delivery of Russian counter-air defence systems to Iran. Russia believes that Iran’s possession of the S-300 is the best opportunity to ensure the safety of its airspace and to prevent new armed conflict in the region, whereas the Saudis see this decision as one-sided in favour of Tehran and directed against Riyadh.

Alongside this, bearing in mind Russian interests first and foremost, it would be wise to take steps to improve relations with Saudi Arabia as much as possible. For it should not be forgotten that King Salman holds the title of Custodian of the Two Holy Mosques in Mecca and Medina, and Saudi Arabia is the centre of the Muslim world with a total population of about 1.5 billion people. But then, the course of history is always in motion: everything changes, and yesterday’s enemies can become today’s friends. That’s to say if the desire and political will were there and, of course, mutual interests.

Victor Mikhin, Corresponding Member of the Academy of Natural Sciences, exclusively for the online magazine “New Eastern Outlook.”

 


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