US-Saudi alliance in twilight zone

President Donald Trump’s remarks about the Jamal Khashoggi affair in the interview with CBS 60 Minutes turned out to be nothing earthshaking. Basically, he said three things: a) Son-in-law Jared Kushner spoke to Crown Prince but latter denied; b) Saudi culpability is yet to be established and if it gets proven, US will be “very upset and angry” and “there will be severe punishment”; and, c) Sanctioning Saudi Arabia is problematic, given deep business interests and “There are other ways of punishing” Saudi Arabia – if it indeed comes to that.

Trump didn’t elaborate what could be the “other ways”. But Saudi Arabia has posted the warning that there will be dire consequences – “any action against the kingdom will be responded to with greater reaction” – if the US dared to proceed on any such track of “economic sanctions, using political pressure or repeating false accusations.” Interestingly, Saudis alluded to “the support of allies” in countering the “organized campaign” against it.

An influential Saudi establishment figure subsequently dilated on the likely retaliation in the event of US sanctions, claiming Riyadh has drawn up a list of 30 “potential measures”:

  1. Saudis will not accede to Trump’s requests to boost oil production (to make up for shortfall due to Iran sanction) and instead let oil prices rise to “$100, or $200, or even double that figure.”
  2. Saudis will stop using dollars for oil trade and may instead switch to a “different currency, Chinese yuan, perhaps.”
  3. Saudi-Iranian rapprochement may ensue, with Russian help.
  4. Saudis may end intelligence cooperation over terrorist threat to western countries.
  5. Saudis may turn to Russia and China to source weapons.
  6. Saudis may allow a Russian base in the northwestern province of Tabuk situated “in the heated four corners of Syria, Israel, Lebanon and Iraq.”
  7. Saudis will revive links with Hamas and Hezbollah.
  8. Saudi will pull out of investments in the US, estimated at $800 billion.

In sum, Saudi Arabia will make a strategic shift toward the Russia-China-Iran axis. In immediate terms, Saudis can hit the US hard by leveraging its status as energy superpower. A dramatic jump in oil prices will boost Saudi income but create difficulties for oil consuming countries, especially EU, China or India. It will boost Russia’s income and make western sanctions even more ineffectual. Again, it will undermine the US’ game plan to bring down Iranian economy to its knees.

On the other hand, any Saudi move to dump dollar in oil trade may significantly galvanise the nascent moves to dethrone dollar as world currency, but its impact can only be in a medium-term scenario.

In geopolitical terms, Saudi Arabia has been a pivotal ally of the US during the past 7 decades. A breakdown in the US-Saudi alliance will unravel the entire American strategy in the Middle East. A US retrenchment from the region may become inevitable.

On the other hand, the ascendancy of Russian and Chinese influence will hurt western interests. Indeed, Israel’s overall security position gets weakened, too.

The bottom line, of course, is that Iran’s rise as regional power will become irreversible – although Iran-Saudi rapprochement is easier said than done. Interestingly, the Iranian reaction to the Khashoggi affair echoes how Tehran took advantage of the overthrow of Saddam Hussein in Iraq.

How far Russia (and China) will want to get entangled in the Saudi standoff with the US? Moscow and Beijing are seeking better relations with the US and may hope that a chastened America would make a more reasonable interlocutor. After all, they’d assess that a US retrenchment in the Middle East will inexorably bring the curtain down on America’s global hegemony. Which in turn will accelerate the trends toward multipolarity. It is improbable that Russia or China will join hands with Saudi Arabia to destabilize the world economy.

The Saudi prognosis that the “if Washington imposes sanctions on Riyadh, it will stab its own economy to death” is plain hyperbole. Then, there is a fundamental contradiction insofar as the survival of the archaic Saudi regime is critically dependent on American support. Trump wasn’t exaggerating when he recently said that if the US support is withdrawn, Saudi regime would pack up in two weeks. There are historical forces swirling around Saudi Arabia, which have been kept at bay due to the sheer US presence. For example, the eastern Shi’te provinces of Saudi Arabia are restive; the Houthis of Yemen will seek revenge.

Above all, Saudi regime has been exporting radical forces as geopolitical tool for the Americans. These forces may come to haunt Saudi internal security. The Muslim Brotherhood, al-Qaeda, etc. are waiting in the wings. Islamism, paradoxically, poses an existential threat to the Saudi regime.

Succinctly put, the sins of the past will come to wreak vengeance on the Saudi regime with a demonic fury sooner than one may think once America’s protective shield is withdrawn. In fact, the possibility of the disintegration of the Kingdom of Saudi Arabia, which is after all an arbitrary creation of British imperialism in the early 20th century, is very real.

What complicates the situation today is that the US is a badly divided house and the Saudis are used to dealing with Washington establishment in an idiom that is no longer in vogue. Left to himself, Trump would have handled the Khashoggi affair much as his predecessors in the White House might have done. But that is not going to be possible with the Deep State and the US Congress arm-twisting him. On the other hand, Crown Prince Mohammed bin Salman represents a new type of Saudi leadership that is not shy of a faceoff and seeks a reset of the relationship with the US.