Saudi Prince Hits a New Year Reset by Making Allies Not Enemies

On a day that Saudi Arabia jolted the oil market with an output cut it called a “gesture of goodwill,” the kingdom’s de-facto ruler took center stage in a mirrored concert hall, ready to resolve a different crisis.

Crown Prince Mohammed bin Salman had presided over the rift with Qatar for more than three years. But now there were just two weeks before a new U.S. leader took office, and President-elect Joe Biden had promised to treat Saudi Arabia as a “pariah.” Combined with threats from Iran and a weakening economy, the prince’s calculation had been shifting: reconciliation looked better than conflict.

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So on Tuesday, as television cameras rolled in the northwestern Saudi town of Al Ula, Prince Mohammed hugged Qatar’s ruler and ended the split, casting himself as a peacemaker. Hours later, Saudi Arabia announced it would cut oil production by a million barrels a day to support prices for fellow producers — a directive that the energy minister said came straight from the crown prince and which sent the shares of U.S. energy companies soaring.

With those moves, Prince Mohammed underscored his public presence with a conciliatory tone – at least for now. Since the 35-year-old prince rose to power in 2015, the world’s largest crude exporter had entered into a series of uncharacteristically high-risk ventures: a war in Yemen, partially cutting ties with Canada, waging a bitter oil price war with Russia, and flirting with a trade war with Turkey.

New Approach

One Gulf-based diplomat, who asked not to be named discussing Saudi internal politics, described Prince Mohammed as attempting to pull two levers of influence at the same time. With one, he’s eking out whatever gains he can squeeze from the Saudi-friendly administration of Donald Trump. This has been done by drawing on the desire of special adviser Jared Kushner, who attended the summit, to also project himself as a peacemaker. With another lever, he’s positioning himself as a leader that Biden can’t afford to alienate or ignore, especially by appearing to be constructive.

“This is an effort to take a leadership role, to try and gain some diplomatic advantage with the incoming Biden administration, and a realization perhaps that the last four years allowed too much foreign policy adventurism,” said Karen Young, a resident scholar at theAmerican Enterprise Institute in Washington, D.C.

Trump was close to Saudi Arabia, taking his first foreign trip as president there, driving a hard line against its arch-enemy Iran, and shielding Prince Mohammed from repercussions for the 2018 murder of Washington Post columnist Jamal Khashoggi by Saudi agents in Istanbul.

Costly Conflicts

It’s not just Biden driving the new tone, though – the terrain Prince Mohammed treads has also shifted. His plan to diversify the economy and wean it off oil faces major setbacks, and the kingdom’s reputation has taken a dive after a series ofscandals. The coronavirus pandemic increased the urgency of challenges at home.

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During much of last year, Prince Mohammed took a step back from the public sphere and hunkered down on the Red Sea coast in Neom, one of his signature futuristic mega-projects. It was the finance minister, Mohammed Al-Jadaan, and King Salman — Prince Mohammed’s father — who addressed the country, warning citizens of tough times.

At Tuesday’s summit, King Salman was absent and Prince Mohammed was the star. The setting reflected the prince’s ambitions, highlighting his plan to turn Al Ula into a worldtourism destination. After the meetings, he took Qatari Emir Sheikh Tamim bin Hamad on a tour. They rode in a white Lexus with Prince Mohammed at the wheel.

The image would have been unthinkable a few years ago, when the prince’s closest advisers regularly disparaged Qatar. Saudi Arabia and its allies have accused the wealthy Gulf state of interfering in their internal affairs, supporting extremism and using its influential media channels as propaganda weapons against neighbors, charges that Doha denies.

Global Clout

Regional dynamics were key in prompting the mending of ties, including Saudi Arabia’s desire to focus on Iran, said Hesham Alghannam, a political scientist and senior research fellow at the Gulf Research Center. Biden has said he’ll look to rejoin the nuclear deal with Iran that Trump abandoned, an outreach viewed with trepidation by Saudi Arabia that’s also provided added incentive for it to mend ties with Arab neighbors.

“Saudi wants to be the referee of the disagreement between Gulf states, instead of being part of these conflicts,” Alghannam said.

The output cut was another demonstration of the kingom’s regional and global clout. Energy Minister Prince Abdulaziz bin Salman, an older half-brother of the crown prince, said it showed Saudi Arabia leading the oil world and helping others suffering from lower oil prices, including Iraq.

But even that move highlighted a change in Saudi Arabia’s oil policy under King Salman and Prince Mohammed. After decades of priding itself on putting oil above politics, the royal palace has become more interventionist, and its energy machinations more politicized.

To that end, Prince Abdulaziz described the production cut as a “political, sovereign” step rather than a “technical” one. It will be costly, too. At current prices, it’ll cost the kingdom $3 billion a month in lost oil revenue, according to Bloomberg News calculations although the actual figure could end upsmaller.

But its global impact was immediate. Crude prices jumped to a 10-month high above $50 a barrel. Meanwhile, Saudi Arabia is allowing Russia to boost output, a first, and less than a year after their price war. It’s another sign that the kingdom isn’t looking for confrontation for now.

— With assistance by Vivian Nereim, Farah Elbahrawy, and Abeer Abu Omar

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