Obama Gains Leeway With Saudis as Oil Dependence Declines

Updated on
  • U.S. production, falling oil prices are hitting Saudi economy
  • King Salman's White House visit may air differences over Syria

US President Barack Obama arrives at the White House in Washington, DC, on September 3, 2015 upon his return from a three-day trip to Alaska.


The U.S.-Saudi relationship isn’t what it used to be.

One of the main reasons is oil. The U.S. needs a lot less of it from Saudi Arabia than it once did.

So as President Barack Obama met with Saudi King Salman at the White House Friday, he held more leverage than ever in a long-standing, and often fraught, strategic alliance.

Saudi Arabia isn’t the powerhouse it was when the U.S. and its gas-guzzling cars and industry demanded more and more imported crude. It relied on the desert kingdom to keep the spigot open. Booming U.S. energy production over the last decade has changed the balance along with falling prices for oil. From 2003 to 2015, the Saudi share of the U.S.’s oil supply declined by
half to six percent.

“We’ve got a different kind of relationship with Saudi Arabia now and there are issues that are much more pressing,” said Brett Bruen, a former Obama White House director of global engagement who is now president of the Global Situation Room, a consulting firm. “A couple years ago, energy would have been at the top of the talking points the president had.”

At the start of the Oval Office meeting, Obama said he and Salman would discuss ways to resolve a variety of conflicts, including in Yemen and Syria, as well as the nuclear deal with Iran and combating the Islamic Republic’s “destabilizing activities.”

‘Challenging Time’

“This is obviously a challenging time in world affairs, particularly in the Middle East,” Obama told reporters. A joint statement released later made no mention of oil.

The king said through a translator that the Saudis wanted to “deepen our cooperation” with the U.S., stressing economic and military interactions.

“Our relationship must be beneficial to both of us, not only on the economic field but on the political and military and defense field, as well,” Salman said.

As part of the meetings, the U.S. and Saudi Arabia announced work on a framework for what the White House said would be “a new strategic partnership for the 21st century.” Neither the White House nor the Saudis elaborated beyond increased investment opportunities.

The shift in the U.S.-Saudi relationship has been gradual. From the OPEC oil embargo of 1973 to the 1991 Gulf War it’s waxed and waned. Obama’s predecessor, George W. Bush, strolled hand-in-hand with Crown Prince Abdullah during a meeting at the president’s Texas ranch in 2005. The Saudis later rebuffed Bush’s appeals for increased oil production as gasoline prices in the U.S. approached $4 a gallon.

More recently, differences emerged over the U.S. reaction to the Arab spring in 2011. They have been exacerbated by the U.S. response to the civil war in Syria -- Obama has resisted engaging in a military confrontation with President Bashar al-Assad’s regime -- and by tension over the nuclear deal with Iran, Saudi Arabia’s regional power rival. The Saudis and their Gulf allies have acquiesced in the deal after assurances the U.S. would bolster military support to them.

‘New Territory’

“It’s new territory, a new phase of bilateral relations,” Karen Young, a senior resident scholar at the Arab Gulf States Institute, a Washington policy group, said of the relationship formally established in 1933. “Some of it is shifting leadership, which will have its own prerogatives, and some of it is the economics.”

Crude oil accounted for 45 percent of Saudi Arabia’s $1.6 trillion gross domestic product in 2014, and returns are diminishing as the U.S. is becoming a smaller customer.

Jeff Prescott, the White House National Security Council’s senior director for the Middle East, said the two countries are able to work through differences without overturning their essential link.

“The U.S. and Saudi Arabia’s relationship is really rooted in this sort of shared strategic objective we have in our commitment to the region,” he told reporters Wednesday on a conference call.

First Visit

Salman was making his first visit to the U.S. since ascending to the throne in January. He’s looking for Obama’s help in diversifying the kingdom’s economy in the face of declining oil income, even as the Saudis are hedging their bets by building ties with other countries, including Russia and France.

Salman, 79, whose health has curbed his travel, is accompanied on his visit by Deputy Crown Prince Mohammed bin Salman, his son and defense chief. The official No. 2, Crown Prince Muhammad bin Nayef, the king’s nephew, is staying behind to run the kingdom.

The biggest topics on the agenda for Obama and the king are U.S.-Saudi military cooperation, the Syrian civil war and the conflict in Yemen, where the U.S. has backed Saudi-led airstrikes against Houthi rebels, according to Paul Pillar, a senior fellow at Georgetown University’s Center for Security Studies.

“The basic priorities and preferences of Saudi Arabia and of the United States are significantly different on several important regional issues,” Pillar a former U.S. intelligence official for the Mideast, said in an e-mail. “The main brake on any further straining of the relationship is the Saudis’ awareness that the relationship with the United States is the most important bilateral relationship they have.”