Saudi Arabia key to strategic, economic goals of the US
Deepening bilateral investments is an important priority for both countries as they look to bolster economies
US President Donald Trump’s recent visit to Saudi Arabia drew so much fanfare and media attention it was sometimes difficult to focus on the critical issues. With the dust finally settling and the flood of photos and videos reduced to a trickle, we can take a deeper look at the most important aspects of the visit.
There is a general consensus that the meeting between Trump and Saudi Deputy Crown Prince Mohammed bin Salman was a success. Not only was it described as a “historic turning point” that “marked a significant shift in relations, across all political, military, security, and economic fields”, but there is also little doubt this shift will materialise.
Historically, the US and Saudi Arabia have maintained strong relations as a result of their strategic cooperation on a number of issues. Initially, USSaudi relations were focused chiefly on cooperation in the oil industry, given that US businesses have been involved in Saudi Arabia’s oil industry since 1933, when Standard Oil of California (now Chevron) was given preference over European drillers operating in Iraq and Iran at the time. Since then, the links have mushroomed into deeper investment relations.
Nevertheless, of late, ties between the US and Saudi Arabia, and subsequently many other countries in West Asia and North Africa, have become strained. During the Obama administration, various core issues, particularly Iran and its growing influence in the region, became points of divergence. Given that Trump’s presidency was anticipated to be starkly different from his predecessor’s, not least on foreign policy, observers were closely watching dealings between Saudi Arabia and the US.
Since Washington and Riyadh have shared goals, including maintaining regional stability, and a historically strong economic relationship, it was unlikely relations would not be strengthened further. Nevertheless, the Trump administration’s rhetoric about ‘radical Islam’, attempts to impose a travel ban on citizens of some Muslim-majority countries, and the subsequent laptop ban were seen as unhelpful and, sometimes, even inflammatory. These moves brought into question once again the future of the region’s relationship with the US, but Trump’s visit has done much to quell these uncertainties on many fronts, with Mohammed bin Salman describing Trump as a “true friend of Muslims who will serve the Muslim world”. A number of key investment and business deals were signed during the visit. In particular, the $110 billion arms deal indicates not only strengthening of economic ties but also stronger commitment by the US to support the security of the Gulf region. The deal reportedly includes the sale of precision weaponry that had been suspended under the Obama administration.
Additionally, a forum for US and Saudi business executives preceding the official visit also resulted in a number of multibillion-dollar agreements, including a $6-billion deal by Lockheed Martin to assemble 150 Black Hawk helicopters in Saudi Arabia, and General Electric’s announcements of projects it valued at $15 billion.
The US and Saudi Arabia are likely to continue to focus on several core strategic issues where their interests converge. The most critical of these include oil prices, countering Iranian influence in the region, and the fight against Daesh. Coordination between the US and Saudi Arabia on international energy markets to stabilise global oil prices will prove to be particularly important given that the kingdom is trying to balance the implementation of Saudi Vision 2030 with the third running year of low oil prices.
With shale oil producers also relying on a stronger price to survive, it is likely some sort of balancing agreement can be achieved. Given that other Opec and non-Opec members have managed to find points of agreement, which was considered unlikely before, a genuine agreement between the US and Opec is possible.
Additionally, deepening bilateral investments is an important priority for both countries. Since Vision 2030 also relies significantly on foreign direct investment and technology transfer, a partnership with the US will continue to be economically strategic. Moreover, Saudi Arabia is a large investor in a number of sectors in the US, and prioritising further investment in job-creating sectors will also be important for Trump’s ‘America First’ vision.
Aruba Khalid is a senior analyst at The Delma Institute, an international affairs research house located in Abu Dhabi
Trump’s visit has done much to quell uncertainties on many fronts, with Saudi describing him as a “true friend of Muslims”