President Trump with King Salman during his visit to Riyadh in May 2017
Confounding some forecasts, the Opec-non-Opec market monitoring meeting in Algeria yesterday made no recommendation for output to be lifted to offset a new price surge and suggestions oil could rise to $100 a barrel once sanctions on Iranian oil exports come into effect next month.
“The markets are adequately supplied,” said Saudi Arabia’s Energy Minister Khalid al-Falih. “I don’t know of any refiner in the world who is looking for oil and is not able to get it.”
This is essentially true, but there’s a political subtext to Saudi Arabia’s reluctance to raise output.
The kingdom’s had enough of President Trump.
On 20 September, he delivered a Twitter message that called for Opec to help reduce oil prices, now heading towards $80 a barrel.
Saudi Arabia didn’t bother to respond.
Relations between Saudi Arabia and the White House have soured after months of US government actions that have undermined President Trump’s personal relations with the kingdom’s leaders.
In March 2017, Prince Mohammed bin Salman, son of King Salman and now Saudi Arabia’s crown prince, met Trump in the White House. He declared a new era had started for Saudi-US relations after tensions between Riyadh and Washington during the presidency of Barak Obama.
Trump’s first overseas visit as president was to Riyadh in May that year. To Saudi Arabia’s delight, he said he would focus on Iran’s threat to the Middle East status quo. Trump announced the kingdom was ready to increase spending with US firms and investment in America.
On 13 October 2017, Trump said the US would refuse to certify deals with Iran but stopped short of terminating the deal. In May this year, he announced America would pull out of the 2016 Joint Comprehensive Plan of Action and reimpose sanctions on the Islamic Republic.
But things were already going wrong in his relationship with Saudi Arabia.
In December 2017, Trump said the US would recognise Jerusalem as Israel’s capital. King Salman expressed his dismay. Undeterred, Trump personally opened the US embassy in the city in May. He compounded the insult the following month by misrepresenting in a Twitter message a telephone conversation he had with King Salman about oil prices.
The US since has done nothing in response to Israel’s decision to allow the expansion of West Bank settlements and cut support for UNWRA which sustains millions of Palestinian refugees. Jordan’s been pressed to form a confederation with the West Bank which involves separating it politically from Gaza. PLO offices in the US have been closed.
None of these actions seriously undermine US relations with Saudi Arabia. The kingdom longs for an end to the Arab-Israel conflict and is prepared to make concessions to make this happen.
But Trump’s approach is unbalanced and provocative. His promised peace plan won’t secure Saudi support unless its thoroughly revised.
More important are signs that Trump’s domestic political standing is in jeopardy. Mid-term elections in November could see the Republican Party lose the House of Representatives to the opposition Democrats. Their control of the house is likely to lead to congressional measures to constrain Trump and even replace him.
Electoral setbacks in November will invigorate Trump’s Republican opponents. A second presidential term is now in question.
Saudi Arabia can sense the winds of change in Washington and is preparing for life without Trump in just over two years.
Even if he’d handled his relationship with Riyadh more conventionally, the kingdom would be thinking about what comes when he’s gone.
Allowing oil prices to rise is a sign of things to come.
America’s still got Trump.
But Saudi Arabia’s anticipating the future and dumped him already.