Cheta Nwanze, Lead Partner, SBM Intelligence

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Subjects of Interest

  • Fiscal Policy
  • Geopolitical Analysis
  • Governance
  • Politics

Of Biden fist bump and MBS uppercut 18 Nov 2022

At a Democratic Party event in November 2019, then-presidential candidate Joe Biden called long-term US ally, Saudi Arabia, a “pariah” that his would-be administration would not sell arms to. He expressed commitment to making sure that Saudi Arabia pays for the killing of Washington Post contributor Jamal Khashoggi, who was an American resident at the time he was murdered inside the Saudi Consulate in Istanbul, Turkey, in October 2018. Joe Biden said: “There is very little social redeeming value in the present government in Saudi Arabia.”

Strong words would need a firm hand to back them for execution. At the end of that campaign and election, Joe Biden became President of the United States, ousting Donald Trump. He quickly had the Office of the Director of National Intelligence declassify an intelligence report that fingered the Saudi crown prince, Mohammed bin Salman (MBS), in the Khashoggi murder. After the CIA had concluded the report in November 2018, the US Congress and the Trump’s White House were briefed on its content. However, it was classified by the Trump administration, which elected to sanction 17 Saudis who were linked to the murders but take no actions against the MBS out of a need to protect the economic and geopolitical interests of the US.

The report, released in late February 2021, said that the crown prince personally approved the operation that led to Khashoggi’s killing. Essentially, the report's public release made it clear that the US held MBS ultimately responsible for the murder at an official level.

President Biden went even further with his confrontational stance by rejecting interactions with MBS who is next in line to be King of Saudi Arabia. He stopped US assistance to Saudi Arabia's military efforts in its war against Yemen and rescinded America’s official categorisation of Yemen’s Houthi rebels as terrorists, a classification that Saudi Arabia demands because of the Houthi’s alliance with Saudi’s geopolitical rival, Iran.

Experts warned about the possible backlash against US geopolitical and economic interests and emphasised a need to maintain a broad range of relevant allies at a time when Russia and China were taking increasingly unfriendly positions in the geopolitical and economic space. Those fears were justified by the events following Russia's invasion of neighbouring Ukraine in February 2022.

The Russia-Ukraine war has stifled post-pandemic economic resuscitation and triggered food and energy price inflation that have weakened the global economy and affected the living standards of billions of people worldwide, with Europe and the US seriously affected. Energy production and export have always played a critical role in the Russian economy. They have now become a major factor in military outcomes, with Russia's impact on the energy market playing a role in how well the war can be funded and also a decisive factor in how far other European countries would go against Russia considering the effects of energy disruption on their citizens, especially with winter fast approaching.

When faced with the dilemma of what to do under this circumstance, the Biden administration rediscovered the concept of realpolitik and tried to make nice with the Saudis by making a visit to the Kingdom of Saudi Arabia in July. He had to make a forced show of camaraderie with a fist bump with MBS, in the hope of Saudi support for an oil market supply boost that would bring down energy prices and help keep Russia under pressure.

The Saudis finally offered in early October a fist of their own. But contrary to what America had hoped for, the Saudi’s fist came in the form of an uppercut aimed at the chin of the US. The Saudis chose to align with Russia and led the OPEC+ group to agree to a cut of about 2 million barrels per day of oil supply. This has, as of the time of writing, raised the price of Brent crude by 2% to $93.80 a barrel, its highest since 15 September.

To support America’s effort in Ukraine, it was necessary to have increased oil supply to bring down prices and hamper Russia financially. Such downward price pressure would also slow down inflation induced by high energy prices. This was important for the US and its Western allies, whose populations are becoming increasingly restive because of higher living costs.

There is the possibility that the Saudis timed their action just before the American mid-term elections in November in order to ensure that biting energy costs would force the American electorate to move towards the Republicans, whose leader, Donald Trump, will definitely be friendlier to MBS should he return to power in two years’ time.

The US government has now committed to releasing 10 million barrels from its National Strategic Petroleum Reserve, as Washington continues to look for a way to check oil prices and is urging allies to do the same. Keeping energy costs down is critical for Joe Biden’s party to do well in the mid-terms.

MBS for now is the winner of this tit-for-tat diplomacy. But it may be committing the same error that Biden made. For neutral observers, however, the importance of painstakingly considering many scenarios before opting for diplomatic confrontation with the potential to negatively impact many lives is apparent.

Saudi Arabia and Russia have not traditionally been allies. But they took steps towards a closer relationship in 2016 with Russia joining OPEC+, an expanded Organization of the Petroleum Exporting Countries, which seeks to protect the interest of non-Western oil-producing countries who were concerned about the impact of fracking on the energy markets.

Biden and the West need to recognise that there is an assortment of interests that nations can legitimately be pursuing in their international relations. In the emergent multipolar world, weaker nations are not simply pawns in the geopolitical calculations of the more powerful ones. And it is simplistic – if not mischievous – to view countries as either pro-US or pro-Russia. The world is much more complex than that. Whatever postures are adopted should consider the economic and geopolitical goals of countries and geopolitical or economic blocs.

These events are a lesson for Nigeria on the potential pitfalls of diplomatic naivety. In a fast-change world, the country must re-calibrate its diplomatic policy to achieve its national goals. It is important to know when to deploy diplomatic leverage as appropriate for the goals.

Nevertheless, for its national interest, Nigeria has to actively grow, maintain, and deploy international influence in spaces like ECOWAS, Africa, and other spheres. Doing this effectively would require a proper integration of efforts not just via traditional diplomatic channels but also by utilising transnationalism and ‘paradiplomacy’. This requires creating a cohesive framework that takes proper cognisance of the goals of allies and opponents. Such policy directions should proactively seek accommodation for the country’s interests in the policies of its neighbours and allies.

The African Continental Free Trade Area (AfCFTA) agreement is a good example of how Nigeria has abdicated its leadership in Africa and its lack of economic foresight in its diplomacy. For AfCFTA, it is not too late. Nigeria can still lead the initiative and develop a win-win strategy that sees the countries of Africa benefit from the momentous initiative to promote intra-Africa trade.

Cheta Nwanze is Lead Partner at SBM Intelligence.