Biden forces Saudi thaw amid rising oil prices

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When Joe Biden took over the White House from Donald Trump last year, there was no country whose relationship with the United States changed more suddenly and drastically than Saudi Arabia.

As a candidate, Biden had vowed to treat the kingdom as an “outcast” amid mounting evidence that Saudi officials were behind the 2018 killing of dissident Jamal Khashoggi; Within a month in office, Biden had declassified US intelligence indicating that Crown Prince Mohammed bin Salman, the country’s de facto leader, was behind the killing.

But amid soaring oil prices and record inflation at home, the US president – who once called the “battle between democracies and autocracies” a central guiding principle of his foreign policy – was forced to make flip-flop.

Biden is now expected to meet Crown Prince Mohammed in person during a visit to Riyadh later this month, a descent facilitated by a furious high-level diplomatic offensive from the president’s top Middle East adviser and energy adviser.

On Tuesday, the White House was able to show the first fruits of the policy reversal: OPEC agreed to ramp up oil production to help replace production lost due to international sanctions against Russia, and Riyadh helped extend a truce between the Saudi-backed Yemeni government and the Houthi rebels. .

“Biden was skeptical of the Saudis long before MBS came on the scene,” said Daniel Shapiro, former ambassador to Israel during the Obama administration, using the crown prince’s nickname.

But Shapiro, a prominent member of the Atlantic Council, said the White House had to make an unsentimental choice in order to add oil supplies to the tightening global oil market and ensure Riyadh supported the tightening. American approaches to Russia and China.

“It’s the basic market that would make a trip worthwhile,” he said. In exchange, Saudi Arabia wants assurances that Washington will provide weapons and coordination to protect the kingdom from Iran and its proxies.

The oil production deal followed months of shuttle diplomacy led by Brett McGurk, Biden’s Middle East adviser, and Amos Hochstein, his senior energy adviser. The pair were in Riyadh a week before Thursday’s OPEC+ meeting, their fourth visit to the Saudi capital in recent weeks.

But diplomacy has involved more than oil supplies, according to people familiar with the talks, with a broader energy security deal on the table, as well as a reset of the security arrangement.

The Saudis are seeking more defensive equipment, including Patriot anti-missile systems, new security guarantees and assistance for a civilian nuclear program, according to Helima Croft, global head of commodities strategy at RBC Capital Markets and a former analyst at the CIA.

Asked on Friday about a visit to Riyadh, which is expected to take place as part of a larger Gulf Cooperation Council gathering during an already planned presidential tour of Israel and Europe, the president insisted that there was nothing to announce yet.

But he defended the Saudi approach, insisting it was part of promoting peace in the Middle East rather than a harsher assessment of US economic needs. “Look, I’m not going to change my view of human rights,” Biden said. “But as President of the United States, my job is to bring peace if I can.”

For the market, Thursday’s deal could be mostly symbolic – signaling Saudi Arabia’s willingness to resume its role as an active swing supplier, the ‘central bank of oil’. Actual oil additions may be less than advertised.

That may partly explain the market’s reaction on Thursday, with the international benchmark for Brent actually rising 1%, to settle at $117.61 a barrel. OPEC+ has pledged to increase supply by 648,000 barrels per day in July and August. But most were already planned. The proposed net increase is only 216,000 bpd.

The extra supply could be overshadowed by supply losses from Russia, which produces 10% of the world’s 100 million barrels of crude a day. The International Energy Agency has said Russia could lose up to 3 million b/d of production later this year as sanctions stifle its industry.

In addition to tensions sparked by Khashoggi’s killing, US-Saudi relations have been strained by Biden’s failure to back Riyadh in the Yemeni civil war, which is widely seen as a proxy conflict between the Saudis and its main rival. regional, Iran.

Biden has also shown a preference for engaging with King Salman over Crown Prince Mohammed, a stark departure from the Trump years, when the crown prince was assiduously courted by Jared Kushner, Trump’s son-in-law and adviser.

Some members of Biden’s team have called for a Saudi thaw for months, arguing that a new relationship with the 36-year-old crown prize must be struck with a leader who will likely lead the longtime US ally for years. decades.

It remains to be seen how far the American president is ready to go. As a candidate, Biden pledged not to sell more weapons to the kingdom and he tried to keep human rights and democratic values ​​at the top of his international agenda.

“I have been clear that human rights will be at the center of our foreign policy,” he said last summer when US troops withdrew from Afghanistan.

But the war in Ukraine has forced the White House to rethink much of its initial foreign policy agenda, from climate policy to its laser-like focus on America’s rivalry with China.

“This was an administration that came into office talking about net zero, the end of the oil age, a new political paradigm, a pivot to Asia – but in a crisis, it has now returned to tried and true diplomacy,” Croft said. “It’s a return to Realpolitik. . . in a crisis, you always pick up the phone and call Riyadh.

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