Chinese sphere of influence expansion threatens U.S. interests in the Middle East – normalization restores partnership

Without a change in course, the United States and Saudi Arabia are headed toward a strategic divorce. Were that to happen, sensitive military and dual-use commercial relationships between Riyadh and Beijing would preclude Washington from sharing certain military hardware, intelligence, and high-tech systems with the kingdom. And as the Chinese-Saudi partnership grows, Israel will also find itself under pressure to keep its distance, although normalization with the Saudis remains a coveted strategic prize for its prime minister, Benjamin Netanyahu. Any exposure and vulnerability to China inside Israel’s defense and high-tech sectors inevitably causes problems for U.S.-Israel defense and high-tech cooperation; in effect, were the Saudis to leave the American alliance structure and integrate into China’s, Israel would be forced to choose between its most important benefactor and diplomatic relations with the most significant kingdom in the Arab world.

All of this is great news for China and its most natural ally in the Middle East, Iran. As the U.S. pulls back further from the region and Saudi-Israel normalization gets put on hold, China will fill the vacuum—using its influence on both Iran and on America’s erstwhile Gulf allies to play the kind of global energy politics the U.S. mastered during the cold war. What is now a primarily commercial partnership between Beijing and Riyadh will take on increasing strategic significance, and Saudi Arabia (along with Iran) will become one of several oil-producing friends China can rely upon during moments of confrontation with the United States.

Tehran, for its part, will score a major victory by blocking the development of an integrated U.S.-Israel-Arab security architecture that could contain it, and perhaps even defeat it. Instead, it will use its Palestinian terror proxies to provoke clashes with Israel that stir emotions in the Arabic-language press and refocus Middle Eastern attention on the Israel-Palestinian conflict instead of on its own role in fomenting chaos and bloodshed around the region. For the Saudis, normalization with the Jewish state will lose its appeal, becoming a risky move in support of an alliance with the U.S. that no longer appears worthwhile.

If Crown Prince Mohammed bin Salman (known in the Western media as MBS) intended to  by cozying up to Beijing, he succeeded. After nearly a year of inaction, the White House leaned on the Senate to confirm a new U.S. ambassador to Saudi Arabia, Michael Ratney, who presented his credentials in Riyadh in late April. National Security Advisor Jake Sullivan visited the kingdom in early May, and Secretary of State Antony Blinken is planning to follow in June. These are important steps, but healing the relationship’s open wounds and brokering Israeli-Saudi normalization will take more than promises and platitudes; it will require creative reimagination from both capitals and a commitment not merely to maintain, but to upgrade, the alliance.

Since the presidency of Franklin D. Roosevelt, the United States and Saudi Arabia have been through a lot to together—for better and for worse. This relationship has weathered no small number of tensions and crises, despite having no formal agreements or official documents that would give it a binding status. The story begins with Saudi Arabia’s founder, King Abdulaziz, who fueled the United States to victory over Germany and Japan in World War II. After the war, the kingdom emerged as a major cold-war ally in the Middle East. But the Saudi-led oil embargo of 1973—retaliation for U.S. support for Israel during the Yom Kippur War—sent the American economy into a tailspin.

Yet the relationship recovered from this particular low point. By 1975, Riyadh agreed to make the dollar the standard currency for the global sale of oil—a decision that would help establish the dollar’s primacy in international trade, and thus the primacy of the American financial system. And in the 1980s, Abdulaziz’s son, King Fahd, helped Ronald Reagan win the cold war by covertly funding Afghan mujahideen attacks against the USSR while increasing oil production to drive down prices, thereby drying up resources for an oil revenue-dependent Kremlin.

By 1990, ties were stronger than ever. President George H.W. Bush ordered more than 500,000 U.S. troops to Saudi Arabia to defend the kingdom and drive the forces of the Iraqi dictator Saddam Hussein out of Kuwait. Yet just ten years later, things took another dramatic turn for the worse with the September 11 attacks. Of the nineteen hijackers, fifteen were Saudi nationals. The Saudi government was not behind the attacks—but the episode exposed the royal court’s decades-long strategy of appeasing radical voices within the kingdom at the expense of U.S. national security.

But even this setback did not prove sufficient to break the U.S-Saudi alliance. Presidents George W. Bush and Barack Obama both made multiple visits to the kingdom, while the Saudis took a dramatic turn away from their terror- and Islamism-supporting ways. It seems that with each crisis, the strategic paradigm of “oil for security”—that Saudi Arabia would rely on the United States for its physical security while the United States would rely on Saudi Arabia for its energy and economic security—has in the end reasserted itself.

Until now.

In Riyadh, a generation of leaders whose worldviews were molded by the cold war is being replaced by a younger generation raised in a more interconnected era, with the thirty-seven-year-old Crown Prince Mohammed bin Salman at the helm. In Washington, after decades of hard-power presence in the Middle East and an invasion of Iraq that fundamentally altered the region, the United States is pulling back, responding to populist campaign rhetoric, shifting attention and resources to the Indo-Pacific, and ceding great-power influence in the region to China and Russia.

At the same time, the last decade ushered in geopolitical and economic transformations that called into question the doctrine of oil for security. Wounds first opened by President Obama have turned gangrenous under President Biden.

Obama’s perceived abandonment of the Egyptian president Hosni Mubarak in favor of the Muslim Brotherhood sent shockwaves through the Arab world—as did Obama’s decision to walk away from a threat to use force against the Syrian dictator Bashar al-Assad. Add in the Obama administration’s nuclear deal with Iran—an attempt to rebalance power in the Gulf between Saudi Arabia, an American ally, and Iran, the world’s leading state sponsor of terrorism—while declaring an American “pivot to Asia,” and the U.S.-Saudi relationship found itself on thin ice.

President Donald Trump’s embrace of MBS and reimposition of tough sanctions on Iran appeared at first to be another iteration of the cycle, with reconciliation again following crisis. In reality, it may have done little more than buy time. Trump treated Saudi Arabia transactionally and talked condescendingly. He spoke often of ending “endless wars” in the Middle East, and his precipitous withdrawal of troops from Syria, which left Kurdish allies unprotected from Turkish air power, and his desperation for a peace agreement with the Taliban, which fundamentally weakened the Afghan government, continued the Obama policy of ceding the region to great-power competitors.

For Riyadh, the question of whether the United States would ever again come to Saudi Arabia’s military aid, as it did during the first Gulf War, was tested in 2019 when Iran launched a drone and cruise-missile strike against Saudi Aramco—immediately taking 5 percent of the global oil supply offline and exposing a catastrophic vulnerability in Saudi air defense. President Trump opted against a military response, fearing that American use of force in retaliation for an attack on foreign interests would meet with a backlash that could upend his maximum-pressure campaign on Iran and spur bipartisan calls to lift sanctions on Tehran. Trump reportedly ordered a cyberattack instead and later sent more U.S. troops and missile-defense assets to the region to placate an outraged Saudi leadership.

While not directly connected to the attack on Aramco, Trump’s decision months later to kill Qassem Suleimani, the commander of Iran’s elite paramilitary Quds Force and architect of regional mayhem and sponsorship of terrorism, demonstrated America’s capacity to be a more valuable, albeit sometimes unreliable, military ally than either China or Russia. So too did Trump’s reported interest in exploring a military strike on Iran’s nuclear facilities.

But Joe Biden’s decision while running for president to placate pro-Tehran sentiment inside the Democratic party’s progressive base—vowing to make MBS a “pariah” and to return the United States to the nuclear deal—made it all but impossible to slow the erosion of America’s ongoing commitment in Riyadh. Worse still, Biden governed as he campaigned, attempting to weaken Saudi Arabia’s regional power while elevating Iran’s and declaring economic war on oil, the lifeblood of the Saudi economy. Upon assuming office, he removed the Iran-sponsored Yemeni Houthis from the official list of foreign terrorist organizations, prompting an uptick in missile and drone attacks against the kingdom. He followed up with an order to end U.S. military sales and intelligence support that could help Saudi Arabia target the Iran- and Hizballah-trained Houthis inside Yemen—and then withdrew the extra U.S. missile-defense assets Trump had provided. In short, he drove a stake through the heart of oil-for-security.

Biden appointed Robert Malley—a veteran left-wing think tanker and former Obama administration official known for his advocacy of warmer American relations with Iran, Hizballah, and Hamas—special envoy for Iran with a mandate to loosen enforcement of U.S. sanctions while pleading with Tehran to return to the 2015 nuclear deal. And then, making good on his pledge to isolate MBS, Biden made him persona non grata in the White House and declassified an intelligence assessment about the crown prince’s involvement in the grisly murder of Jamal Khashoggi—an assessment that added no new information to existing public reporting but which was evidently intended to cause the crown prince personal embarrassment.

Then reality set in. Vladimir Putin’s war on Ukraine sent oil prices skyrocketing. Biden scrambled. Washington called Saudi Arabia to help stabilize the market. But MBS was in no mood to do Biden any favors—the higher price of oil, after all, would help finance his massive economic development program, dubbed Vision 2030.

Suspecting MBS was merely playing “hard to get,” Biden reluctantly scheduled a visit to Saudi Arabia under cover of a multilateral forum and agreed to meet the crown prince on one condition: no shaking hands. It was the height of disrespect on MBS’s home turf—and the last straw. MBS welcomed the president and began to shop around for new patrons. Hedging against the U.S., and betting on the emergence of a multipolar world, he pursued several security partnerships simultaneously. He reportedly also put a price on normalization with Israel: NATO-like security guarantees from the United States, a vast expansion of U.S. arm sales, domestic defense production, and a civilian nuclear program that included uranium enrichment on Saudi soil.

Sensing an opening, China’s President Xi Jinping wasted little time in offering Riyadh an alternative strategic framework. China, already Saudi Arabia’s largest trading partner, could offer MBS something new: political and economic influence over Tehran in exchange for expanding relations with the Gulf Cooperation Council (GCC). MBS welcomed Xi to Saudi Arabia in December for a China-GCC summit that ended with a joint communique committing Beijing to the strategic interests of Saudi Arabia, the United Arab Emirates, and the rest of the GCC—explicitly pledging to pursue a regional framework that would address Iran’s sponsorship of terrorism, missile proliferation, and nuclear ambitions.

By March, a deal was hatched. Iran and Saudi Arabia agreed to restore diplomatic ties and to end all direct or indirect attempts to inflict harm on one another. Saudi Arabia—for a price still unknown—bought a period of relative calm along its borders, aiming to halt Iran-sponsored missile and drone attacks that threaten Vision 2030. Iran, facing a collapsing currency, hyperinflation, and domestic unrest, struck back at U.S.-led efforts to isolate it—while increasing its military support to Russia, launching a multi-front attack on Israel, and racing toward the nuclear threshold.

The Saudis claim they had nothing to lose and plenty to gain. Iran, they argue, is the weaker party, suing for peace in Yemen to conserve its resources. If China can use its influence to advance Saudi security interests at a time the United States either cannot or will not, so be it. The door is still open to discuss the terms of an upgraded U.S.-Saudi partnership, but Saudi Arabia will do what it must to defend its interests in the meantime.

Washington should hold no illusions. Should China prove itself a more reliable powerbroker than the United States, a more permanent Saudi-China strategic partnership will likely ensue—one that could include military, nuclear, and other elements that threaten American interests. Indeed, Riyadh has already announced it will apply to become a “dialogue partner” (a status beneath both “member” and “observer”) in the Shanghai Cooperation Organization, the Sino-Russian attempt at a counterweight to the U.S.-led order in Europe and Asia.

The looming threat of losing Saudi Arabia entirely to its main international rivals should focus Washington’s attention. This is more than the latest rough patch in what might seem like a never-ending series of highs and lows that is the U.S.-Saudi relationship. The fact is that the oil-for-security paradigm no longer makes sense in the 21st century, at least not in its historic form, and restoring the alliance will entail rethinking its underlying assumptions.