Biden’s Visit to Saudi Arabia - Main Takeaways
US President Joe Biden recently returned from his first trip to the Mideast region as president, visiting two key allies in Saudi Arabia and Israel. This presidential trip comes amid a significant political shift in the region that has seen a number of Arab states build closer ties with Israel, a close American ally that most Arab states have long shunned. The main topics of discussion in Saudi Arabia would be regional security (particularly the Saudi-Iran nexus), Israel-Arab relations and boostingst oil production to maintain lower prices and counter Russia’s leverage. The resident, who vowed during his election campaign to treat Saudi Arabia as a “pariah”, received a lot of criticism in relation to this trip, even among the Democratic Party. Despite the challenging context, Pres. Biden did emerge with some notable agreements – ranging from cybersecurity to maritime cooperation.
In the context of the war in Ukraine, keeping oil prices from increasing would be a necessary step to guarantee that the Western sanctions on Russia would be effective. The fact that oil and corresponding fuel (petrol/gas) prices have risen globally brings doubt in relation to the efficiency of the sanctions, as we previously analyzed in our blog. Before embarking on this trip, Pres. Biden had hoped to secure a promise from Saudi Arabia to increase its output of oil, which could lead to an easing of global supply pressures. After the organized meetings, Biden said he was doing all he could to increase crude supplies and that he expected to succeed. He also guaranteed that US consumers might feel the effects of his visit to the oil-rich kingdom at the petrol station in “another couple of weeks”.
However, the success of Pres, Biden’s trip and the future of oil prices are still unclear. After the meeting of the leaders, a Saudi official restated the kingdom’s position on production, reaffirming that it would be decided based on demand. State minister for foreign affairs Adel al-Jubeir Oil affirmed that oil is a commodity, and not a political weapon. He also said the kingdom had increased output at various times this year based on demand, and would continue to reassess when needed.
Moreover, in a joint statement released after the meeting, there was no mention of oil supply increases, even though it mentioned that the two countries “renewed their commitment towards the stability of global energy markets” and that the US “welcomed the kingdom’s commitment to support balance in the global oil market”. Besides that, Saudi ministers assured that any policy decisions will be taken according to market logic, in accordance with what’s agreed within the OPEC+ coalition. It is important to note that OPEC has been raising production as it phases out deep supply cuts made when oil prices fell during the coronavirus pandemic, and agreed last month to fasten the additio nal output in July and August. This vagueness on how oil production will be increased highlights the limits of Saudi willingness to cooperate.
We may have to wait for some time before fully assessing the overall impact of Pres. Biden’s visit. While U.S. gas prices have steadily decreased over the last few weeks, the price of oil increased on Monday after the s visit without any agreement on raising supply. Brent crude rose 2.6% to $103.88 on Monday after Saudi Arabia’s foreign minister, Prince Faisal bin Farhan Al Saud, put an end to speculation over an output increase. The negative message that the market has shown on Monday indicates that it is OPEC+ that makes the oil supply decision.
Another sensitive topic that was expected to be discussed during Biden’s visit was human rights violation. The trigger to this conversation was the killing of Jamal Khashoggi in 2018, a US-based journalist and critic of Saudi Arabia's government.. Back then, Saudi officials affirmed the journalist was killed in an operation sent to persuade him to return to the kingdom, while Turkey said the agents acted on orders from the highest levels of the Saudi government. The President was heavily criticized for greeting with a fistbump the Crown Prince during their meeting by human rights groups and also fellow Democrats. For instance, Senator Bernie Sanders on Sunday criticized Biden's visit to Saudi Arabia, affirming that it rewarded a dictatorship and should have never taken place given the background t. In his own defense, Pres. Biden noted that he raised the issue of human rights during the meeting and that he would always stand up for US interests..
Although Pres. Biden’s visit to Saudi Arabia and Israel aimed at energy and national security did not end with an expected outcome, there are still positive signals sent from this trip, such as the new bilateral framework on 5G and 6G, space exploration and public health cooperation with Saudi Arabia. Amid the global inflation pressure as well as the energy crisis mainly induced by the war in Ukraine, the public is anticipating the next moves of major crude oil producers and, mainly, the OPEC+ meeting on August 3rd.
References
https://www.nytimes.com/2022/07/15/world/middleeast/biden-mbs-saudi-visit.html
https://www.nytimes.com/live/2022/07/16/world/biden-saudi-arabia-news
https://www.aljazeera.com/news/2022/7/17/biden-disputes-saudi-ministers-account-of-meeting-with-mbs
https://edition.cnn.com/2022/07/15/politics/biden-west-bank-saudi-arabia-day-3/index.html
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