Thaw in relations between the US and Saudi Arabia: good news for the crude oil markets - at last!

Thaw in Saudi US relations

There are strong indications in Washington that President Biden, after all, is going to meet the Crown Prince of Saudi Arabia, Mohammed bin Salman, leaving many political bigwigs of the Democratic Party in an uneasy lurch.

President Biden, who promised to take on Saudi Arabia over its 'human rights record' during the presidential campaign, did partially keep to his promise during the early days of his administration: the US administration halted sale of some advanced weapons to the Kingdom; it even went as far as removing Patriot anti-missile defence system from Saudi Arabia at some point, leaving it highly vulnerable to the Houthi drone and missile attacks, a situation that prompted the latter to borrow them from Greece on short-term basis.

In March this year, however, US took heed of the Saudi request to provide it with the antimissile interceptors for the Patriot system and fulfilled the need. In addition, the US influence may have resulted in a fewer attacks by the Houthis on the oil facilities in the Kingdom too - in recent weeks.

In direct proportion to the warming relations between the two old allies, the gulf between Iran and the US in particular and the West in general has been widening at an increased pace that in turn makes the revival of the JCPOA, 2015 Iranian nuclear deal, almost unrealistic. 

Not only is the US setting tougher conditions for Iran to stick to, but also warns the latter against seeking nuclear weapons and threatening its neighbours, especially Sunni-majority Saudi Arabia.

The sudden reversal of policy by the US has already gone down very well with the Arab-majority countries in the Middle East - and of course, Israel; they no longer see the US policy over Iran as a form of appeasement in order to get Iranian oil into the crude oil markets to address the supply woes of the commodity.

With the revival of the JCPOA disappearing over the political horizon, the US expects Saudi Arabia, the de facto leader of the OPEC+, to address one of the pressing needs of the former - increasing the oil production to bring down the domestic prices at pumps that has been snowballing into a major political issue in the US.

With the US inflation at 40-year high, the Biden administration, literally runs helter-skelter in seeking solutions to the problem as the economic growth is slowing down with the spectre of a recession on the distant horizon. 

Having repeatedly failed to get the oil output increased by the Saudis, President Biden is planning the personal visit to the Kingdom in the hope of achieving the same goal, which, if successful, could immediately reflect well on his falling approval ratings. 

That may not be the only goal that President Biden tries to achieve with his forthcoming trip: at secondary level, he may try to clip wings of Russia, when it comes to the influence that it holds over the OPEC+; so far, Saudi Arabia has been maintaining good diplomatic relations with Russia, despite the Western animosity towards the latter, following the war in Ukraine; moreover, the Kingdom and Russia almost see eye to eye on the oil production, when it comes to the current crude oil prices.

In this context, stakes cannot be higher for both the US and Saudi Arabia after the planned trip by the US president - and its outcome: a failure is unthinkable; a partial success could be a reasonable achievement and a total success will remain just an aspiration, though, because the Arabs are renowned for honouring their existing loyalties.

In short, it is a case of walking a tightrope for President Biden, even if he is the world's most powerful man. 

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