Why Obama paid a visit to Riyadh? By Alexander Orlov
1 April 2014 — New Eastern Outlook
The deterioration of the situation in Ukraine made substantial changes in the agenda of talks of U.S. President Obama with Saudi leadership in Riyadh on March 28 this year. The main subject of the discussion included the situation around Ukraine, possible joint steps to decrease energy prices, in order to weaken Russia’s economy, promotion of Iran’s moving to a more pro-Western position, to weaken Tehran’s cooperation with Moscow, and only then about Syria and the situation in the GCC.
Obama’s support of the coup in Ukraine and the tough American opposition towards Russia in Ukrainian affairs, led to Washington developing the idea of urgent mobilization of the resources of its rich Arab allies – to oppose Moscow. This is because it turned out that the U.S. and its allies in NATO and the EU had no financial or political leverage, for exerting pressure on Russia.
That is why the White House’s decision, urgently to revive its relations with those major Arab partners, with whom they have not been good recently, seems logical. The more so that, although Riyadh and Washington had differences in the approaches to some international and regional issues, the two countries reduced neither their energy nor military cooperation, as well as intelligence interaction was not stopped in the war being conducted by the United States and the Kingdom of Saudi Arabia against Iran and Syria. In addition, the White House decided to try to form a united front with the leading country in the Arab world against Moscow, and to neutralize Tehran at the same time.
As it became known, in the course of the conversation, Obama suggested that the ruling Saudi dynasty “take vengeance” on Russia for Crimea, by making strikes on three fronts. In Syria, in order to take it out of the orbit of influence of Moscow and Tehran, and to put the whole Levant under the U.S. and Saudi control. To provide financial assistance to the new government in Kiev, in order to make Ukraine an outpost of anti-Russian activities in Eastern Europe. To decrease oil and gas prices significantly, which would be a serious blow to Russia’s state treasury, and to achieve substantial reductions in the consumption of Russian oil and gas by the West.
Washington is well aware that Obama cannot act in any of these areas without Riyadh, especially in terms of using the “energy weapon” against Moscow. In exchange, Obama offered to “give a free hand” to the KSA in the Middle East and the Persian Gulf. The more so, that Riyadh has been granted the right to build a special relationship with Egypt, after the overthrow of Mursi’s government. In general, the U.S. and the West have turned a blind eye to the harsh crushing of the protests of Shiites in Bahrain and the Eastern Province of the KSA. The Saudis received the right to carry out an operation to “subdue” Qatar and to defeat the Muslim Brotherhood. Moreover, the White House has admitted Riyadh to work on the question that is the most important issue for it and Israel, i.e., the Israeli-Palestinian settlement, by giving the Saudis a “green light” to work with Jordan, which now has a special role in the new scheme to settle the Palestinian issue.
However, the rulers of the KSA want much more, and above all, they want Assad’s regime to be destroyed, and American help in order to stop the growing influence of Iran, as well as to form a “Shiite Arc” in the region. Only then can Riyadh recover from the strongly shaken position of the kingdom in the Islamic world. And the overthrow of Assad and capturing Damascus by the pro-Saudi Islamist opposition in Damascus are the only things that can strengthen the position of Saudi Arabia as a leader among the Arab states. This would allow the implementation of its plans for further regional expansion – from establishing a Jordanian-Palestinian federation to the formation of an anti-Shiite league from the Arabian Peninsula to India.
In addition, the Saudis have their own logic here – since Syria can play a key role in supplying Qatari gas to Europe. In 2009-2011, Damascus was the main obstacle to the implementation of a project for the construction of a pipeline from Qatar’s North Field to the EU, which would have allowed a strike at “Gazprom”, via a sharp increase in supplies of cheap Qatari gas to Europe. For various reasons, Damascus did not consent to laying of a gas pipeline through its territory from Qatar to Turkey and the Mediterranean coast of the SAR for further transit to the EU. Thus, while B. Assad stays in power, the construction of the gas pipeline from Qatar to the Mediterranean coast of Syria is impossible. Energy experts calculated back in 2009-2010, that if Sunnis came to power in Syria, instead of the Alawite regime of Bashar Assad, the gas pipeline ‘Qatar – Saudi Arabia – Jordan – Syria – Turkey’ would be built in two years. This would result in huge financial losses for Russia, whose gas cannot compete with Qatari gas, due to the extremely low cost of the latter. Hence, Saudi Arabia is trying to subdue Qatar, through a conflict within the GCC, in order to cut off another option – the construction of a gas pipeline from Iran (South Pars) through Iraq and Syria, which could be a joint project with Russia. Doha would play only a secondary, supporting role, being dependent on Tehran.
Therefore, in Obama’s negotiations with the Saudi rulers, the latter sought U.S. consent to a large increase in the comprehensive assistance provided to Syrian rebels. In particular, to supply heavy weapons and man-portable air defense systems (MANPADS), which would reduce to naught the superiority of the Syrian government forces in terms of firepower, and its complete superiority in the air, and thereby change the military balance in favor of “the anti-Assad opposition”. After that, it would be possible to act under the tested scheme: the creation of no-fly zones near Turkish and Jordanian borders, turning this area into a stronghold of militants, supplying arms and sending large mercenary forces there and the organization of a march on Damascus. In this case, according to the logic of the Saudis, Iran would be forced to move to a strategic defense, which would satisfy Riyadh at this stage, before the next move – arranging a coalition aimed at stifling the Islamic regime in Tehran. Obama asked the Saudis to give $15 billion, in return for all that, in order to support current Ukrainian authorities, explaining that the KSA would be compensated for these financial costs and a temporary drop in oil prices later, by the energy “isolation” of Russia and Iran.
The more so, that there was a precedent for this, when President Reagan and Saudi King caused a sharp decline in oil prices by the dumping of Saudi oil on the world market in the mid-1980s, because Soviet troops were sent into Afghanistan, which ultimately led to the disintegration of the Soviet Union, because of the subsequent economic problems. Today, a much smaller decrease in oil prices – from the current $107 per barrel to around 80-85 dollars – would be enough to make Russia suffer huge financial and economic damages. This would allow the U.S. president not only to get revenge for Crimea, but also to undermine significantly the economy of the Russian Federation, which would be followed by negative domestic political consequences for the current Russian government.
Earlier, American billionaire George Soros said that the U.S. strategic oil reserves are more than twice larger than the required level, and the sale of a part of these reserves would allow exerting pressure on Russia. That is, the blows would hit Moscow from two directions – from the United States and from the Persian Gulf. However, later on, the U.S. Secretary of Energy denied this possibility.
However, there is the question: Did the U.S. President manage to agree with Saudi Arabia to increase oil supplies to the world market to bring down prices? Does the KSA have a possibility to offer significant volumes of oil on the world market, for example up to 3-4 million b/d?
The fact is that the price of $110 per barrel is just the thing that Saudi Arabia needs, because the leadership of the kingdom has extensive socio-economic obligations. And if the standard of living of the Saudis decreases somewhat, due to the fall in oil prices and due to the fall of oil income, the country would be very much at risk to fall into the situation of the “Arab Spring”, like it was the case in Tunisia, Libya, Egypt. And the Saudis are afraid of a repetition of the Arab revolutions. Apparently, the Saudis are not going to offer additional oil on the market in order to bring down the price, just due to the hatred of the United States for the Russian Federation – as this is not profitable for them at all. They could agree on other things, including Qatari gas, Syria and Iran. In addition, the available production capacity of the KSA is not engaged now. This is about 4 million barrels per day. However, it would be impossible to do this quickly. It could take up to one month to increase the production. This is about as much as Iran produced at one time. However, now Iran is going to increase its production, due to lifting a part of the sanctions, and the Saudis are likely not to increase, but to reduce their production to keep oil prices high. And the prices will remain within the range they have been for quite a long time already. They will be in the range from 100 to 110, as this is the most comfortable range for both consumers and producers. Many countries, especially those that can influence the prices, via some manipulations with supply, are extremely interested in having high level of prices. Socio-economic programs are carried out in Venezuela at a price level of about $120 per barrel. In Iran, this figure is 110, and the same in Saudi Arabia. Thus, no one is interested in bringing down prices.
As for Iran, only one thing is clear for the time being: President Barack Obama has reassured Saudi King Abdullah that he would not agree to a “bad deal” with Iran on the nuclear issue. That is, Riyadh did not get what it wanted even on the Iranian issue. After the two leaders discussed their “tactical disagreements”, they both agreed that their strategic interests coincide, said an administration official. The statement of the White House on the results of the two-hour talks reads that Obama reaffirmed the importance for Washington of strong ties with the world’s largest oil exporter. At the same time, the administration official said that the parties had no time to discuss the situation with human rights in Saudi Arabia during their negotiations. In addition, a trusted source in the U.S. State Department said that Washington and Riyadh also discussed the conflict in Syria. According to him, the two countries carried out good joint work aimed at reaching a political transition period, and the support of moderate factions of the Syrian opposition. As for a possible supply of man-portable air defense systems to opposition militants, an informed source in Washington said that the U.S. still was concerned regarding the provision of such weapons to the rebels. However, there is information that Obama’s administration is considering the possibility of lifting the ban on the supply of MANPADS to the Syrian opposition. According to this source, the recent successes of the Syrian Army against the opposition forces may force the U.S. president to change his point of view.
Apparently, Obama and King Abdullah failed to reach clear and specific agreements on all issues on the agenda. There are differences, and the financial and economic interests are more important to Saudi Arabia than helping Washington in implementing its “revenge” on Russia for Crimea. Riyadh is well aware that Moscow and its partners on energy matters have things with which to respond to Saudi Arabia if the kingdom is blindly led on a string by the White House. And it is aware even more that Moscow has levers of political influence in the Middle East and the Persian Gulf. The U.S., in turn, is not ready to resume its confrontation with Iran, especially when Tehran is fulfilling agreements to freeze its nuclear uranium enrichment program. In addition, Washington cannot work actively on Syrian affairs now, in the conditions of ongoing tensions in Ukraine. In addition, the chemical arsenal of the SAR has been half destroyed. And, apparently, Obama saw for himself during his, albeit short, stay in the kingdom that great changes are coming there, associated with the upcoming replacement of the current elderly generation of rulers by another one, which might be accompanied by unpredictable internal perturbation in the KSA. Hence, there is almost complete absence of victorious statements about the “historical” success of the U.S. President’s visit to Saudi Arabia.
Alexander Orlov, political scientist, expert in Oriental Studies, exclusively for the online magazine “New Eastern Outlook”.