In a special segment, Anya Parampil speaks with In Question producer Kei Pritsker to examine the roots of the special relationship between Saudi Arabia and the United States. Kei explains how the alliance is based on Saudi’s ability to manipulate global oil markets through its petrol production, as well as the fact that Riyadh saved the US dollar following the collapse of the gold standard in 1971. Saudi’s decision to only accept the dollar for oil purchases in 1974 breathed new life into the US currency, the viability of which was in question following the Nixon Gold Shock.
Saudi Arabia Denounces Senate Resolution on Khashoggi Murder
The strength of the rebuke indicates how the journalist’s killing has inflamed tensions between Riyadh and Washington
Saudi Arabia on Monday delivered a rebuke to the U.S. Senate for passing a resolution that blamed the kingdom’s crown prince for the murder of journalist Jamal Khashoggi, a rare criticism by Riyadh for its most important ally.
The Saudi Ministry of Foreign Affairs dismissed the Senate’s conclusion that Crown Prince Mohammed bin Salman was involved in the killing as based on “unsubstantiated claims and allegations.” The rebuttal used unusually blunt language for a diplomatic communiqué, showing how the Khashoggi killing has inflamed tensions between Saudi Arabia and much of Washington’s establishment.
“The kingdom categorically rejects any interference in its internal affairs,” the Saudi Ministry of Foreign Affairs said. “And any attempts to undermine its sovereignty or diminish its stature.”The Saudi government has vowed to hold the perpetrators of the Oct. 2 murder accountable and repeatedly denied that Prince Mohammed knew about the operation that led to the death of Mr. Khashoggi—a critic of the Saudi government and a Washington Post columnist—inside the Saudi consulate in Istanbul.But while the Trump administration has defended the crown prince, arguing there is no direct link between him and the murder, hostility toward Saudi Arabia is mounting in Congress and goes beyond the Khashoggi killing.The Senate on Thursday also passed a resolution with bipartisan support calling for the U.S. to withdraw its backing for the Saudi-led coalition war in Yemen. The measure, opposed by House Republicans, is unlikely to affect U.S. military policy in the region for now. The Senate is separately reviewing a bill that would halt weapons sales to the kingdom.
In a classified assessment, the CIA determined that, in the hours before and after the journalist’s death, the crown prince sent at least 11 messages to a top aide who oversaw the operation, The Wall Street Journal reported earlier this month.
It also highlighted areas of bilateral cooperation, including the kingdom’s role in
- keeping oil prices stable and
- countering Iran in the Middle East.
U.S.-Saudi Defense Ties on Track to Weather Controversy
President Trump last year heralded nearly $110 billion in potential deals during a trip to Saudi Arabia in May 2017. Many defense analysts said that figure includes existing commitments and contracts that could last as long as 30 years.
.. “We continue to believe that the death of Jamal Khashoggi will not lead to a major break in U.S. or European defense sales to Saudi Arabia,” said Byron Callan at Capital Alpha LLC. Mr. Callan estimated that Saudi Arabia accounts for about 5% of sales at the big U.S. defense companies.
.. Saudi Arabia is the world’s third-largest defense market after the U.S. and China and the biggest export destination for U.S. contractors, which made more than $3 billion in sales to the kingdom last year
.. The biggest signed deal is a $10 billion purchase agreed in 2014 of hundreds of armored vehicles by a Canadian subsidiary of General Dynamics, which is continuing to make shipments.
.. The kingdom’s wealth and longstanding tensions with Iran led it to plan to purchase best-in-class capabilities such as Lockheed’s Thaad missile-defense system.
.. Saudi Arabia has also bought precision bombs and missiles
.. Defense executives were among prominent attendees lined up for the Future Investment Initiative conference in capital Riyadh next week. A number of executives from finance and industry have pulled out of the conference.
Who needs Saudi Arabia?
SAUDI ARABIA, so far, has tried bluster and bullying to silence the questions about journalist Jamal Khashoggi, who disappeared in the Saudi Consulate in Istanbul two weeks ago Tuesday. On Sunday, a regime statement threatened to “respond with a larger action” to any sanction stemming from the case; Saudi-owned media floated such steps as cutting back oil production, buying arms from Russia and holding back counterterrorism intelligence. On Monday, King Salman told President Trump in a phone call that he “denies any knowledge of what took place,”according to Mr. Trump, who added “it sounded to me like maybe it could have been rogue killers.”
That preposterous suggestion may have anticipated a change in the Saudi story; CNN reportedthat the regime was preparing to admit that Mr. Khashoggi died in an interrogation gone wrong. If so, there must be consequences not just for those who supposedly erred in killing the journalist but also for whomever ordered the illegal operation in the first place. U.S. intelligence intercepts suggest the order came from Mohammed bin Salman, the reckless crown prince whose excesses had been criticized by Mr. Khashoggi in columns for The Post.
.. Saudi Arabia, according to the U.S. Energy Information Administration,supplied 9 percent of U.S. petroleum imports in 2017, or about 960,000 barrels a day. But thanks to the shale revolution, the United States is essentially energy independent: It, not Saudi Arabia, is now the world’s largest crude-oil producer. Last year, U.S. daily oil exports averaged 6.38 million barrels, or nearly seven times the Saudi imports.
If the Saudis cut back production or boycotted the United States, they could temporarily drive up prices, but the beneficiaries would be U.S. shale companies, which over time would fill the gap — and deal a devastating blow to the Saudi oil industry.
..“The Saudis have not concluded a single major arms deal with Washington on Trump’s watch.” Moreover, an end to supplies of U.S. spare parts and technical support, something Russia cannot provide, would quickly ground the Saudi air force. That would have the welcome effect of ending a bloody bombing campaign in Yemen that a U.N. investigation concluded was probably responsible for war crimes.
.. Saudi Arabia does supply the United States with counterterrorism intelligence. But as Andrew Miller of the Project on Middle East Democracy points out, stopping it “would be a colossal error . . . when there’s already a strong perception in Congress and with Americans that Saudi Arabia has fueled extremism.” Mr. Miller notes that a law passed by Congress in 2016 opens the way for civil suits against the Saudi government for any terrorist acts it enables.