Brian M Downing
Saudi Arabia and Russia have failed to agree on production cuts to counter the effect of COVID-19 on oil markets. Putin wanted low prices to cripple the American shale oil industry which is barely profitable and deep in hock. MBS, on the other hand, wanted higher prices to bolster his coffers and fund industrialization.
MBS responded to Putin’s rebuff by jacking production. Oil markets plummeted and benchmark prices may reach $20/bbl. Putin got his way, US shale producers are in trouble.
The view here has long been that Russia and Saudi Arabia are bound to move closer, at the US’s expense. Russia’s chief ally, China, is buying the Gulf’s oil, the US is moving toward oil self-sufficiency, and Riyadh knows that should the kingdom face upheaval, it can rely on Russian troops and mercenaries to crush it with airstrikes and chemical attacks on rebellious cities.
But what can be expected from Russian-Saudi tensions of today?
Syria
One of the sorest issues between Saudi Arabia and Russia is Syria. Riyadh desperately wanted to see the pro-Iran government ousted and replaced by a beholden regime. But rebel forces fought each other as much as they did Damascus and Russian airpower delivered crushing blows.
Might the Saudis back Turkey against Syria and Russia? That’s unlikely. Saudi proxies are in a shambles now. Turkey and Saudi Arabia are not close. Erdogan opposes Saudi influence and uses the anti-monarchal Muslim Brotherhood to that end. Saudi Arabia eyes the Kurds as potential allies with established military prowess, while Turkey sees them as terrorists and a threat to its territorial integrity.
Saudi allies
Riyadh has demonstrated its ability get the ear of numerous American administrations. Obama supported the Yemen war and Trump is increasing tensions with Iran. MBS may prevail upon the White House to increase support for Turkey against Syria and Russia, either by increased support for Erdogan’s position inside Syria or strengthening the US presence in eastern Syria with overseas Syrian oil assets and poses a threat to land links to Iran.
The US is eager to weaken coziness between Putin and Erdogan and draw Turkey back toward NATO. How much these strategic calculations register in the White House today is unclear but they are not lost on Sec of State Pompeo and the joint chiefs.
MBS could ask Israel to cut back on cooperation with Russia. Israel sells hi-tech to Russia, hires Russian engineers to operate offshore oil and gas fields, and ships Russian oil to Red Sea terminals. Neither Netanyahu nor Gantz is likely to show interest. Both know that partnership with Russia will keep Syria on a short leash, now and in the event it reconstitutes itself in coming years.
Oil revenue and popular support
If oil remains in the $20-35/bbl range for an extended period, both Russia and Saudi Arabia will face fiscal and possibly political troubles. Both use oil revenue to placate their publics – along with copious amounts of surveillance and muscle.
However, Russia appears far less vulnerable. Its economy is more diverse than the kingdom’s. Putin is able to present himself as having restored national honor and power. And through displays of himself bare chested on horseback and hunting dangerous game he shows a common touch – in the Russian manner of course.
MBS wants to industrialize his domain but that’s a long way off and lower oil prices push it even further away. He has an immense and restive youth cohort, large parts of which see him as oppressive, inept, sybaritic, and kept in power only with foreign help – hardly an inspiring warrior-king like his grandfather Abdul Aziz.
MBS then may soon find that his oil policies pose fiscal and political problems for the realm. Unless shielded from this by his obliging retinue, he may seek accommodation with Putin fairly soon.
© 2020 Brian M Downing
Brian M Downing is a national security analyst who’s written for outlets across the political spectrum. He studied at Georgetown University and the University of Chicago, and did post-graduate work at Harvard’s Center for International Affairs. Thanks as ever to Susan Ganosellis.