Saudis Turn On Trump | Mohammad Ali Shabani | TMR
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Summary
Takeaways
- ❖Saudi Arabia is shifting towards diplomacy with Iran and away from confrontation, driven by a lack of US protection against Iranian retaliation.
- ❖The Trump administration's perceived unreliability in defending Gulf allies, exemplified by inaction after attacks on Saudi oil facilities and the UAE, is a primary driver for regional realignment.
- ❖The UAE and Saudi Arabia have fundamentally different regional strategies: UAE favors sub-state actors and port access, while Saudi Arabia prefers working with central governments and territorial integrity.
- ❖Saudi Arabia is actively competing with the UAE for non-oil business by requiring multinationals to move regional headquarters to Riyadh.
- ❖China is increasing its influence by vetoing UN Security Council resolutions targeting Iran and potentially offering alternative security and trade arrangements, especially concerning the Strait of Hormuz.
Insights
1Saudi Arabia's Diplomatic Pivot and US Reliability Concerns
Saudi Arabia is increasingly adopting a pragmatic line, seeking diplomacy with Iran and avoiding a return to war. This shift is attributed to the perceived unreliability of US security commitments under the Trump administration, especially after Saudi oil facilities were attacked in 2019 and the UAE faced drone attacks without significant US protection. The Saudis feel Trump prioritizes Israeli interests over those of Gulf Arab allies, despite substantial financial and political investments in the relationship.
NBC News reporting on Trump's reversal on 'Project Freedom' and Saudi/Kuwaiti denial of airbase access; Pakistani Prime Minister thanking Saudi Arabia for efforts to avoid war; Guest's private intelligence on Saudi thinking regarding Iran.
2Divergent Regional Strategies: UAE vs. Saudi Arabia
The UAE and Saudi Arabia are pursuing distinct regional strategies. The UAE prefers working with sub-state actors (e.g., Southern Transitional Council in Yemen, Rapid Support Forces in Sudan) to secure port access and establish itself as a trading nation and capital hub. Saudi Arabia, conversely, emphasizes territorial integrity and works with central governments. This divergence extends to alliance networks, with the UAE pursuing an 'Abrahamic axis' with Israel, while Saudi Arabia considers a security pact with Pakistan, Turkey, and Egypt.
UAE's alleged support for STC in Yemen and RSF in Sudan; UAE's focus on port access in Yemen, Sudan, Libya; UAE and Bahrain signing Abraham Accords; Saudi Arabia's focus on territorial integrity and potential security pact with Pakistan/Turkey/Egypt.
3Economic Rivalry Between Saudi Arabia and UAE
Beyond geopolitical differences, Saudi Arabia and the UAE are in direct economic competition. The UAE's business model relies on attracting international capital and talent as a regional hub. Saudi Arabia, under MBS's Vision 2030, is aggressively trying to diversify its non-oil economy by requiring multinational corporations to move their regional headquarters to Riyadh, directly challenging the UAE's established position.
MBS's Vision 2030; Saudi policy requiring multinationals to move regional headquarters to Riyadh.
4China's Growing Influence in the Middle East
China is increasingly asserting its role in the Middle East, particularly as US influence wanes. China has vetoed a UN Security Council resolution that would have mandated US military action in the Gulf, demonstrating its protective stance towards Iran. China is also exploring alternative security arrangements for energy transit through the Strait of Hormuz and could play a role in managing Iran's enriched uranium stockpile, offering a counterweight to US pressure.
China telling refiners to ignore US sanctions on Iranian oil; China's veto of a UN Security Council resolution pushed by Bahrain; discussions about Iran branding a Strait of Hormuz toll system as a security fee for China; potential for China to hold Iran's uranium stockpile.
Lessons
- Businesses operating in the Gulf should closely monitor the evolving geopolitical landscape and the growing economic rivalry between Saudi Arabia and the UAE, especially regarding regional headquarters requirements.
- Policymakers should recognize that traditional US alliances in the Middle East are being fundamentally re-evaluated by Gulf states, necessitating a re-assessment of US foreign policy and security commitments in the region.
- Investors should consider the implications of China's expanding influence in the Middle East, particularly in energy security and regional trade, as it offers alternative partnerships and challenges existing power structures.
Quotes
"If you're a Gulf Arab ally, if you're say Saudi Arabia who's who's you know shown over the years since Trump's first term that you have a very special relationship with him... and then when push comes to shove when there's an actual war... there's there's little that President Trump will do to protect you."
"The Emiratis prefer working with substate actors and they're content with that. They see that kind of relationship as fulfilling their interests without having to take the full responsibility of a state."
"From the Saudi perspective when they look at relations with the United States, it's about security commitments first and foremost."
Q&A
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