Why Gulf states find it hard to turn on the oil spigot for Biden

For years, when prices at the pumps skyrocketed or an economic crisis loomed, American presidents knew just who to call.

Now with the Ukraine war sending oil prices to over $130 a barrel, and prospects of wider bans on Russian oil and gas threatening a global recession, Washington’s hotline to the world’s largest oil producers is suddenly going unanswered.

The reluctance of longtime U.S. ally Saudi Arabia to increase oil production is about more than economics, insiders and longtime observers say. It is a sign of changing perceptions of their U.S. relationship, the emergence of a multipolar world, and the consequences of a decadelong American pivot from the Middle East.

Rebuffed

President Joe Biden’s attempts to personally call Saudi and Emirati leaders to discuss oil production in recent days have been rebuffed, diplomatic sources and The Wall Street Journal claim.

On the Ukraine war, Saudi Arabia and the UAE have said little. Though Saudi Arabia voted in favor of the U.N. Security Council resolution condemning the Russian invasion, the UAE abstained.  

So far tiny Qatar has been the only Arab Gulf state to answer the Biden administration’s calls for energy, pledging to boost liquefied natural gas supplies to Europe.

After days of intense American diplomacy, the Emirati Embassy in the United States Wednesday voiced its support for boosting oil output with Emirati Ambassador Yousef Al Otaiba saying in a statement the UAE “will be encouraging OPEC to consider higher production levels.”

It is a far cry from the 1980s, when Saudi Arabia expanded oil supplies at Washington’s request to weaken the Soviet Union as prices crashed, or in recent years when a president’s phone call could alter energy prices.  

While American officials express “surprise” over their reluctance, Arab Gulf governments insist that it is in fact the U.S. that has changed, failing to live up to its side of their special relationship.

They see their decades-old arrangement, American protection and security in return for American influence over the flow of Gulf oil, as articulated in the “Carter Doctrine” by then-President Jimmy Carter in 1980, as largely defunct.

As proof of America’s unreliability, Arab Gulf officials cite the U.S. war on Iraq that empowered Iran and allowed Tehran to station missiles pointing at their capitals, an Obama administration that ignored their security concerns in the Iranian nuclear deal, and the Trump administration’s refusal to retaliate when an Iranian drone strike damaged Saudi Arabia’s oil infrastructure in 2019.

The Biden administration’s determination to reorient American policy away from the Middle East and toward Asia – a pivot that began with the Obama administration – and its disastrous withdrawal from Afghanistan left many Gulf governments convinced that America could no longer be counted on, despite the continued large-scale presence of U.S. military forces in the region.  

The recent barrage of Houthi missiles from Yemen into Emirati and Saudi cities heightens this sense of insecurity.

“The biggest difference between now and 15 years ago is the sense of Washington’s lack of reliability that is pervasive in the Gulf, especially among the countries that have been closely aligned to Washington for decades,” says Hussein Ibish, senior resident scholar at the Washington-based Arab Gulf States Institute.

“As a result, these countries view strategic diversification of their foreign relations just as important as tending to their relationship with Washington. Their response to Ukraine is the biggest indicator of this shift.”

Russian tilt

In the past eight years, as Gulf states looked for other world powers to help protect their security, Russia, along with China, stepped forward.

When Russia intervened in 2015 to save the Bashar al-Assad regime from collapse in Syria, two years after President Barack Obama declined to enforce his declared “red-line” over Mr. Assad’s chemical weapon use, Gulf states sat up and took notice.

If America was pivoting away from the region, Russia was increasingly seen as a new power broker.

“The moment Russia entered the Syria theater militarily and saved Bashar Assad from an imminent demise, the region concluded that Russia is there to stay. Russia won this begrudged respect from countries in the region,” says Anna Borshchevskaya, senior fellow at The Washington Institute for Near East Policy.

This led the UAE to sign a strategic security cooperation agreement with Russia in 2018; Saudi Arabia signed a similar agreement with Moscow in August 2021.

When the UAE purchase of F35 jets from America was held up by Biden administration concerns over Abu Dhabi’s ties with China, Russia offered its fighter jets as an alternative.  

When the U.S. withdrew its THAAD systems (Terminal High Altitude Defense) from Saudi Arabia abruptly last fall, Russia began talking up its S-400 anti-missile system.

Gulf states’ refusal to take a stance on Ukraine so as not to upset their ties with Russia “highlights the failure of American policy to change the perception that it is not reliable,” says Ms. Borshchevskaya.

Values disconnect

If security concerns pushed Gulf states toward Russia, a convergence of political interests and ideological harmony has cemented their ties.

As many Gulf states – all absolute monarchies – pushed back against democratic and Islamist movements post-Arab Spring, Russian President Vladimir Putin pitched a centralized, strongman model of governance as an alternative to Western democracy that prioritized economic stability over freedoms, which resonated in Gulf capitals.

This has led Russia, the UAE, and Saudi Arabia to back the same military strongmen in post-revolution Arab states, such as President Abdel Fattah al-Sisi in Egypt, warlord Khalifa Haftar in Libya, and the military junta in Sudan.

In contrast, both the UAE and Saudi Arabia have come under heavy criticism in the U.S. Congress and media for their roles in the devastating Yemen war, human rights track records, and support for armed actors in Sudan.

President Biden pledged on the campaign trail to treat Saudi Arabia as a “pariah,” and has refused to deal or speak with Saudi Crown Prince Mohammed bin Salman, the de-facto ruler of the kingdom, freezing him out for his alleged role in the assassination of journalist Jamal Khashoggi.

Veteran diplomats say Mr. Biden’s refusal to engage with the crown prince has “complicated” U.S.-Saudi cooperation.  

Oil wars

Another reason behind Saudi Arabia’s reluctance to boost oil production is rooted in dollars – and sense.

OPEC-Plus is currently producing oil at rates set in an agreement hammered out with Russia in the summer of 2020 that ended a devastating four-month price war between Riyadh and Moscow that pushed oil to negative prices at the height of the pandemic and drained hundreds of millions of dollars from the Saudi treasury.

Having won the costly test of wills with Mr. Putin, the Saudi leadership is loath to upset an arrangement upon which its entire economic transformation is built.

“The problem is, the Saudis have all these elaborate plans predicated on having won the pricing war with Russia and with everything set at the current production levels – and now they are suddenly being told they have to up production,” says Mr. Ibish. “It’s a big ask.”

By boosting production now, experts say Saudi Arabia would see a short-term increase in revenue but a drop in medium- and long-term oil revenues, unraveling its 10-year plan to wean the kingdom off oil, build up a tech sector, and create jobs for its young population.

Quid pro quo?

While smaller Gulf states have signaled to Washington their willingness to boost oil production, they cannot act without agreement from Saudi Arabia, which may be holding out for U.S. concessions, starting with Biden’s treatment of the crown prince.

“The one demand the Saudis have is to rehabilitate [Mohammed bin Salman]. And domestically that is impossible to fulfill at the moment,” cautions Bruce Riedel, senior fellow at the Brookings Institution. “The image of Biden running hat-in-hand to the Gulf is not one that is politically popular at home.”

The UAE, meanwhile, changed its position on oil production after Secretary of State Antony Blinken on Tuesday pledged Washington’s “commitment to help the UAE bolster its strong defensive capabilities against threats from Yemen and elsewhere.”

If Washington and Riyadh remain at an impasse, observers say other Western countries pressing the Gulf for more oil, along with the prospect of Venezuelan and Iranian crude being brought to market, may spur Gulf states to turn the spigot on.

“The world has changed in the past 10 days. This is an international crisis, not a European one, and it is no longer possible for regional countries to remain on the sidelines,” says Mr. Ibish.