RIYADH, Saudi Arabia—An
unwritten pact binding the U.S.
and Saudi Arabia has survived
15 presidents and seven kings
through an Arab oil embargo,
two Persian Gulf wars and the
Sept. 11 terrorist attacks. Now,
it is fracturing under two leaders who don’t like or trust each
other.
Saudi Crown Prince Mohammed bin Salman, the kingdom’s
37-year-old day-to-day ruler,
mocks President Biden in private, making fun of the 79-
year-old’s gaffes and questioning his mental acuity, according
to people inside the Saudi government. He has told advisers
he hasn’t been impressed with
Mr. Biden since his days as vice
president, and much preferred
former President Donald
Trump, the people said.
Mr. Biden said on the campaign trail in 2020 that he saw
“very little social redeeming
value in the present government in Saudi Arabia.” He refused to talk to Prince Moham med for over a year, and when
they finally did meet in Jeddah
in July, Saudi officials present
felt that Mr. Biden was uninterested in the policy discussions,
the people said. U.S. officials
said Mr. Biden devoted significant time and energy to the
meetings.
Geopolitical and economic
forces have been driving
wedges into the relationship
between America and Saudi
Arabia for years. But the enmity between Mr. Biden and
Prince Mohammed has deepened the tension.
“Rarely has the chain of broken expectations and perceived
insults and humiliations been
greater than they are now,”
said Aaron David Miller, a veteran U.S. diplomat in the Middle East now at the Carnegie
Endowment for International
Peace. “There’s almost no trust
and absolutely no mutual respect.”
The decision by Saudi-led
OPEC+ to cut oil production—
raising crude prices at a time of
high inflation just before an
American election and despite
U.S. pleas to hold off—has cemented both leaders’ resolve to
reconsider a strategic relationship that has underpinned the
global economy and Middle
East geopolitics for almost 80
years, with once-unthinkable
retaliatory measures now on
the table. The White House has
said Mr. Biden wants to review
whether the Saudi relationship
is serving U.S. national security
interests, on top of an administration reassessment last year.
Saudi officials say it may now
be time for them to reassess
the U.S. relationship, too.
Choosing sides
The Russian invasion of
Ukraine and the West’s response have exacerbated tensions, since the production cut
propped up oil prices that help
fund President Vladimir Putin’s
war effort and undermined
U.S.-led sanctions on Moscow.
In the Biden administration’s
view, the Ukraine war is a decisive historical moment that requires countries to choose a
side, with the OPEC+ cut putting the Saudis closer to the
Russians. The Saudis see an opportunity to assert their own
interests in a world where the
U.S. isn’t the undisputed superpower, saying they can support
Ukraine and work with Russia
in OPEC+ at the same time.
Saudi officials say they are
frustrated the relationship is
still viewed through the narrow
lens of oil and security. Riyadh
has framed the recent OPEC+
decision as vital to its core national interests, a technical decision that they say was needed
to prevent a precipitous drop in
crude prices. Prince Mohammed now sees high oil prices as
perhaps his last shot to use the
kingdom’s natural resources to
modernize the Saudi economy
and build a post-oil future.
Saudi Arabia plans to highlight that effort this week in Riyadh, with its Future Investment Initiative conference.
Organizers said they didn’t invite U.S. officials, who have previously attended at the cabinet level, after the Biden administration weighed withdrawing from participating.
“Our economic agenda is
critical to our survival. It’s not
just about energy and defense,”
the Saudi foreign minister,
Prince Faisal bin Farhan, said in
an interview. “It may have been
50 years ago but that certainly
is not the case today.”
Prince Faisal denied that
Prince Mohammed had privately derided Mr. Biden or told
aides he was unimpressed by
him and favored Mr. Trump.
“These allegations made by
anonymous sources are entirely
false,” said Prince Faisal. “The
kingdom’s leaders have always
held the utmost respect for U.S.
presidents, based on the kingdom’s belief in the importance
of having a relationship based
on mutual respect.”
U.S. officials said Mr. Biden
has pushed the relationship beyond oil by working to deepen
ties between Saudi Arabia and
Israel, two countries that drew
closer under Mr. Trump and
are aligned in their view of Iran
as the region’s biggest threat.
Though Israel and Saudi Arabia
have no formal diplomatic relations, they have been secretly
expanding their security cooperation with White House help.
Adrienne Watson, spokeswoman for the White House
National Security Council, said
Mr. Biden “has engaged with
leaders from across the region”
to establish “a more stable and
integrated Middle East.”
The path ahead is likely to
be rocky. At risk for Washington are counterterrorism operations, efforts to contain Iran
the president angered the royal
by immediately raising humanrights allegations, people close
to the talks said, including the
2018 death of Jamal Khashoggi,
a Saudi journalist based in
Washington who was killed and
dismembered by a team of
Saudi agents inside the kingdom’s Istanbul consulate.
The killing of Mr. Khashoggi
remains the most important
flashpoint between the two
men. Among Mr. Biden’s first
acts as president was releasing
an American intelligence report
concluding that the crown
prince had ordered the operation to capture or kill Mr.
Khashoggi, an allegation the
Saudi government denies.
The disagreement reflects
Prince Mohammed’s sense that
it is unacceptable to keep raising the killing and Mr. Biden’s
sense that U.S. values demand
it not be glossed over, said Jon
Alterman, director of the Middle East program at the Center
for Strategic and International
Studies.
“The American bet is that
the Saudis need the United
States and will come around,
and the Saudi bet is the opposite,” Mr. Alterman said.
In the past, Saudi kings and
American presidents were able
to smooth out turbulent periods with strong personal relations. In 2005, just a few years
after 15 Saudis participated in
the Sept. 11, 2001, terrorist attacks, President George W.
Bush had hosted Crown Prince
Abdullah at his Texas ranch,
where the two men were photographed holding hands.
In the early 1970s, Saudis
partially nationalized American
oil interests in the kingdom and
launched an oil embargo that
ushered in crippling inflation.
Yet President Richard Nixon
met King Faisal and toasted his
wisdom during a state dinner
in Jeddah in 1974.
“When you’re dealing with a
country that’s basically run by
five people, it has to be on a
personal level,” said Steven
Cook, a Middle East expert at
the Council on Foreign Relations.
Since the 1940s, Washington’s relationship with this insular monarchy grew around an
implicit understanding that the
U.S. would ensure Saudi Arabia’s territorial integrity and
the kingdom would keep oil
flowing to a global economy
dominated by America.
New calculations
Those calculations have
changed over time. The Saudis
once sold the U.S. over 2 million barrels of oil every day, but
that’s fallen to less than
500,000 barrels a day, according to the U.S. Energy Information Administration. The U.S.
grew to become the world’s
biggest oil producer, and China
is now the biggest buyer of
Saudi oil, followed by India.
After decades of war, Washington has sought to reduce entanglements in the Middle East
to focus on a rising China and
resurgent Russia. The main
American initiative in the region—the Obama-era nuclearcontainment deal with Iran—
has also strained relations with
Saudi Arabia, which opposes
lifting sanctions unless Tehran
also reins in its support for regional militias and the proliferation of ballistic missiles that
threaten Riyadh. The Saudis
were irked by the Obama administration negotiating with
Iran about national security issues without consulting them.
“Oil-for-security is dead,”
said Ayham Kamel, head of
Middle East and North Africa at
political-risk advisory firm Eurasia Group.
When Mr. Biden was elected,
Prince Mohammed huddled
with advisers at a seaside palace to complete a plan to woo
the new president, according to
people familiar with the matter.
The Saudis delivered a few
and Israel’s deeper integration
into the region. For the Saudis,
a breakdown with the U.S.
would jeopardize its national
security and ambitious economic reforms. Mutual trade
and investment worth hundreds of billions of dollars are
also on the line.
The next big test comes in
early December, when three
events with major significance
for global energy markets are
set to collide: another OPEC+
meeting and plans by the European Union for an embargo of
Russian oil and by the Group of
Seven wealthy nations to cap
the price of Russian crude.
The Saudis have signaled
that they could raise oil production in December if the
market loses Russian oil because of the EU embargo or the
G-7 price cap, according to people inside the Saudi government. U.S. officials, skeptical
that Riyadh would or could do
that, say this will be a key litmus test for where the kingdom stands: with Ukraine and
its Western backers or with
Russia.
Mr. Biden and Prince Mohammed tried to build a personal rapport during the president’s trip to Jeddah in July,
where they fist-bumped ahead
of a three-hour meeting. But concessions on a topic Mr. Biden had campaigned on—human rights—including the
eventual release of Loujain alHathloul, a prominent
women’s-rights campaigner
who says she was tortured in
detention, and two SaudiAmerican prisoners. And they
patched up a feud with Qatar
after leading an economic boycott against it which Mr. Trump
had initially supported.
Mr. Biden’s response
shocked Prince Mohammed, the
people said. In his first weeks
in office, the president froze
Saudi arms sales, reversed a
last-minute Trump administration decision to label Yemen’s
Houthi rebels a foreign terrorist organization, and published
the intelligence report on Mr.
Khashoggi’s killing which Mr.
Trump had dismissed.
For the Biden administration, these steps were a necessary correction. To the Saudis,
Mr. Biden’s early moves were a
slap in the face.
In a relationship that has
historically been steered by
presidents and kings themselves, the White House handed
the Saudi file to Brett McGurk
of the National Security Council
and Amos Hochstein at the
State Department, who, despite
extensive diplomatic experience, carry little of the clout or
policy mandate of officials who
handled the relationship in previous administrations.
The pair communicated
mainly with two of Prince Mohammed’s brothers: Prince Abdulaziz, the oil minister, and
Prince Khalid bin Salman, who
was recently elevated to defense minister. The two Americans lobbied hard inside the
administration for engagement
with the Saudis, and when the
Saudis bucked the U.S. on oil
production over the summer,
Mr. Hochstein sent Prince Abdulaziz a note suggesting he
felt betrayed, The Wall Street
Journal has reported.
The White House is wary of
blowing up the relationship,
which could jeopardize sensitive security operations. Mr.
Sullivan said the president
would consult with members of
both parties—some of whom
are vowing dramatic action—
about how to respond to Saudi
Arabia, including potential
changes to U.S. security assistance, when Congress reconvenes after the midterm elections next month.
Shortly after the meeting in
Vienna, Saudi officials met with
think tanks and lower-level U.S.
officials to make their case.
They said Washington has underestimated how much Saudi
Arabia has helped Ukraine and
they were surprised by the
American reaction to the
OPEC+ decision, meeting attendees said.
One drastic option: Saudi officials have said privately that
the kingdom could sell the U.S.
Treasury bonds it holds if Congress were to pass anti-OPEC
legislation, according to people
familiar with the matter. Saudi
holdings of U.S. Treasurys increased to $119.2 billion in June
from $114.7 billion in May, according to U.S. Treasury data.
Saudi Arabia is the 16th largest
holder of U.S. Treasurys, according to federal data.
“It’s hard to imagine either
side saying ‘All right, let’s put
this back together,’ ” said Mr.
Cook of the Council on Foreign
Relations