Oil, Terrorism and the Khashoggi killing
By Dag Harald Claes, University of Oslo
“Few relationships are as vital, under as much pressure, and as poorly understood as that between the United States and the Kingdom of Saudi Arabia” (Bronson, 2006, pp. 2-3). It is also of vital importance for Saudi Arabia – the hegemonic power among the oil producers. “The dimensions of potential incompatibility relate to the very core of Saudi foreign policy. The informal alliance with the United States both strengthens and weakens the Saudi position on most key issues” (Niblock, 2006, p. 143).
In May 1933, Standard Oil of California was granted a sixty-year concession for oil exploration and production in eastern Saudi Arabia. In July 1941, President Franklin D. Roosevelt, after considering a request from the US companies operating in Saudi Arabia that the US government give financial aid to ibn-Saud, instructed one of his aides: “will you tell the British. . . I hope they can take care of the King of Saudi Arabia. This is a little far afield for us” (Yergin, 1991, p. 394). The US policy changed during the war, partly due to the perception of an increased need for imported oil, and partly due to the perception of the lack of Britain’s capacity to secure Western geopolitical interests in the region. In 1943 the US companies operating in Saudi Arabia persuaded the US government to extend ‘lend lease’ aid to Saudi Arabia. This laid the foundation for the political ties between Saudi Arabia and the United States. Roosevelt and the Saudi Arabian King ibn-Saud, met in early 1945, and a US security guarantee to Saudi Arabia was established in 1947. In October 1950, President Harry S. Truman wrote to the King: “I wish to renew to your majesty the assurances which have been made to you several times in the past that the United States is interested in the preservation of the independence and territorial integrity of Saudi Arabia. No threat to your Kingdom could occur which would not be a matter of immediate concern to the United States.”[i]The US–Saudi relationship developed both at the political level, through the military guarantee and weapons deliveries, and at the economic level, through the US company Aramco.
A vivid illustration of the US security guarantee to Saudi Arabia came with the Iraqi attack on Kuwait in August 1990. Symbolically, the first US military operation was called ‘Desert Shield’. The aim was to protect Saudi Arabia. The operation gave Saudi Arabia weapons deliveries and military support on a tremendous scale, but it also created some lasting negative effects on the US–Saudi Arabian relationship as US military personnel became present in the Kingdom. This provoked Islamic fundamentalists in both Iran and Saudi Arabia. Bomb attacks against US facilities and personnel in Saudi Arabia attest to the level of tension created. It worsened the dilemma of the royal family, between the need for US support against external security threats and the possibility that this support itself increases internal security threats.
Historically, there are two situations where the solidity of the US-Saudi alliance has been severely tested. The 1973 oil embargo imposed a severe test on the relationship. The Saudi regime did not seek the embargo, but felt pressured by other Arab countries. In October 1973, a conference of Arab Oil Ministers cut oil production by 5 percent and decided to cut it by a further 5 percent each month until “Israeli forces have completely withdrawn from all Arab territories occupied in June 1967 and the legitimate rights of the Palestinian people are restored” (Evans, 1990, p. 440). They also agreed to stop all oil supplies to the United States. This, obviously, represented a major blow to US-Saudi relations. Having joined the embargo, King Faisal gained prestige among other Arab countries and relieved some of the internal pressure on the regime. However, the oil embargo did not change the US-friendly policy pursued by Faisal and Crown Prince Fahd. Already in June 1974, Fahd made an official visit to Washington, resulting in a comprehensive agreement on economic, technical, and military cooperation. Furthermore, “Riyadh expressed its readiness to help maintain a regular supply of oil to the market and to curb the rise in oil prices” (Abir, 1993, p. 67).
In 2001, the 9/11 terrorist attack challenged the US–Saudi alliance overnight. Most of the hijackers were Saudi Arabian citizens. In the eyes of US leadership, the Saudi royal family seemed unable to control its own Islamists, let alone the global threat they constituted. They also feared popular reaction towards Saudis in the US. About six hundred Saudis left the US in the weeks following 9/11. Saudi Arabia neither participated nor publicly supported the next two major US military operations in Afghanistan and Iraq. In 2003, all US troops were withdrawn from Saudi Arabia. On both sides, the alliance became contested and debated. The Saudi regime had to tread extremely carefully in order to preserve the security guarantee from the US and not provoke more internal radical Islamists, with the potential of undermining the regime itself. In the US, the alliance became subject to open public debate, and criticism. “Even with these heavy pressures on the relationship, however, oil continued to provide a massive incentive for the United States and Saudi Arabia to cooperate” (Colgan, 2013, p. 241). The statement made by Gregory Gause III in the aftermath of 9/11 also calls for reflection on the US–Saudi alliance. “We [the US] should think of Saudi Arabia not as a friend, or as an enemy, but as a strategic partner on a number of very important issues for our interests: most importantly, on oil issues and the stability of the Persian/Arabian Gulf area.”[ii]
The recent killing of Jamal Khashoggi in the Saudi Arabian consulate in Istanbul has released a third crisis in the relationship between the United States and Saudi Arabia. Khashoggi was an outspoken critic of the Saudi Arabian regime. His critic of the war in Yemen and the role of Crown Prince continued when he, in December 2016, was expelled, moved to the United States and began writing columns for The Washington Post.
On the 12th of October 2018, he was killed inside the Saudi Arabian consulate in Istanbul, later the Saudi Arabian government acknowledged the killing conducted by a task force established by the government, but claim that it was a tremendous mistake and that the Crown Prince Mohammed bin Salman had not ordered it.[iii] Intelligence information from Turkey and the CIA apparently suggest otherwise. The public attention to the issue will continue for months. For the purpose of this blog, the focus is on the consequences for the US-Saudi relationship. As of writing, the members of the US Senate are suggesting some form of reaction against Saudi Arabia by the US, while the White House is treading water, suggesting there is a lack of evidence and emphasizing the US interest in sustaining the good relations with Saudi Arabia.
This brings us back to oil. Due to a breakthrough in the technology of extracting oil from rock formations, the United States has experienced a remarkable increase in domestic oil production. The so-called ‘shale oil’ has doubled US oil production over the last ten years. Apparently, this would make oil imports from Saudi Arabia and other producers in the Middle East less important to the United States. However, the US has never been particularly dependent on oil from this region. US imports from the oil producers around the Persian Gulf has very seldom constituted more than twenty percent of total US imports. Furthermore, today’s oil market is a 24-7 trading market with barrels changing hands several times from loading to unloading. It also contains a large paper market for forward and futures contracts. Today, it is close to impossible for a producer to control the destination of an oil shipment. It follows, that the political ties and military presence are less relevant for securing physical oil supplies from abroad. The US military presence in the Persian Gulf and geopolitical emphasis on the relationship with Saudi Arabia, are determined by the importance of this region, and Saudi Arabia in particular, for the supply and price of oil on the global oil market. Almost 18 million barrels of oil are shipped out of the Persian Gulf every day. This is close to forty percent of all internationally traded oil. This role of the region is not reduced even though the United States itself has become more self-sufficient.
The fact that the US has devoted large resources in keeping the flow of oil from the region safe and secure, is to some extent as providing a collective good to all oil consumers. The Fifth Fleet of the US Navy is devoted to this task. US military aid to Saudi Arabia is another key element in the US presence in the region. The US weapon exports to Saudi Arabia is also beneficial for both parties. US political and military withdrawal from the Persian Gulf region would have geopolitical consequences, as other powers might be tempted to increase their influence in the region. A continued US influence in the region will require allies. Given the present withdrawal from the Iranian Nuclear Deal, US sanctions against Saudi Arabia will find the US in conflict with both of the most powerful states around the Persian Gulf.
Unfortunately, the killing of journalists is rather common. The killing of regime critics and dissidents even more so. Although we do not know the full consequences of the killing of Jamal Khashoggi yet, it might happen that the present US president Donald Trump thinks about the Crown Prince Mohammad bin Salman as his predecessor Franklin D. Roosevelt did about Anastasio Somoza: «He may be a son of a bitch, but he’s our son of a bitch».
Abir, M. (1993). Saudi Arabia: Government, Society and the Gulf Crisis London: Routledge.
Bronson, R. (2006). Thicker than oil : America’s uneasy partnership with Saudi Arabia. Oxford ; New York: Oxford University Press.
Colgan, J. (2013). Petro-Aggression – When Oil Causes War. Cambrdige: Cambrdige University Press.
Evans, J. (1990). OPEC and the World Energy Market: A Comprehensive Reference Guide. Essex: Longman.
Niblock, T. (2006). Saudi Arabia: Power, Legitimacy and Survival. London: Routledge.
Yergin, D. (1991). The Prize – the epic quoest for oil, money and power London: Simon & Schuster.
[i] FRUS, 1950, vol. 5, pp. 1190–1191, cited in (Yergin, 1991, pp. 427-428).
[ii] “The future of U.S.–Saudi Relations,” testimony before Subcommittee on Middle East and South Asia, House Committee on International Relations, May 22, 2002.
[iii] BBC News, «Khashoggi death: Saudi Arabia says journalist was murdered”, 22. October 2018. https://www.bbc.com/news/world-middle-east-45935823.
Credit: Edgar Blog
Image: Zbynek Burival