Reviews | The United States has leverage over Saudi Arabia. It’s time to use it.

What would lead the Saudis to get it so recklessly wrong with their recent OPEC+ mistake? Stunned energy commentators suggested that the Saudis were simply concerned about their threatened financial returns, acting rationally. Denying any political motivation, Ali Shihabi, a Saudi analyst, insisted in the New York Times that the decision was simply to “keep the price within an acceptable range”.

But this assertion is unjustified. OPEC has never cut production in such a tight market and these production cuts will lead to unsustainably low oil inventories, sending the price of oil skyrocketing out of any “acceptable band”. Furthermore, the G-7 oil price cap plan does not target OPEC; it is strictly limited to Russian oil.

Nor can this Saudi move be justified by the non-existent global recession that its leaders cite. Currently, markets are very tight, with lush profit margins of 73% for Saudi Arabia. In other words, Saudi Arabia had no immediate need to cut supply, unless it sought to harm the United States for the benefit of Russia.

All OPEC members have recently made huge profits, except Russia, as it is OPEC’s least efficient producer. It costs Russia $46 a barrel to extract oil, but with American technology the Saudi cost is only $22 a barrel. Moreover, only Russia has had to offer huge rebates of $35 a barrel to customers like India and China, as few others want sanctioned Russian oil.

To be clear, Saudi Arabia remains important for energy security and stability in the Middle East, for global economic prosperity, and as a regional ally against Iran, but it made a terrible mistake this week. The country’s support for Russia is set to trigger a sweeping overhaul of US-Saudi relations – even as the regime attempts to ‘disparage’ its international image in the wake of Washington Post the brutal murder of columnist Jamal Khashoggi and the humanitarian catastrophe caused by the Saudi war in Yemen.

Members of Congress are already debating how best to respond. Some propose extending national antitrust laws to international trade. Others are proposing to revive a GOP initiative to withdraw US troops from Saudi Arabia. But that idea has failed before as the US would rather have its own troops there than Russian or Chinese troops.

A simpler and far more urgent measure to bolster US national security would be to suspend all US military supplies, sales and other aid to Saudi Arabia. This includes the controversial, new and hastily planned Red Sands test facilities in Saudi Arabia.

US military collaboration with the Saudi regime is more extensive than many realize, but it also gives the US significant economic and security leverage over Riyadh. Today, Saudi Arabia is extremely dependent on US defense aid, purchasing the vast majority of its arms from the United States. The country cannot replace defense suppliers unless it wishes to partner with Russia, Iran or China for far inferior systems that have no interoperability with their existing weaponry. (Although Saudi Arabia sources military technology from other countries, it is generally low-grade weapons and small arms such as grenade launchers, rifles and legacy ammunition.)

Perhaps even more important than Saudi Arabia’s dependence on American weapons is its reliance on American companies to help develop the local defense industry through big-budget joint ventures. . These sensitive and intensive arrangements – which have received little public attention – were largely initiated in 2017 and outsourced sensitive technology and US jobs to Saudi Arabia without any US oversight. The United States does not have arrangements of this magnitude with other allies.

Given the early-stage nature of these joint ventures as well as the minimal interoperability between Saudi Arabia’s current weapons system and potential foreign replacements, there is little Saudi Arabia can do to respond. to this proposed legislation other than coming back to the table and negotiating in good faith with the United States. . As one expert noted, “It would take decades to switch from American and British planes, for example, to Russian or Chinese planes. The same goes for tanks, communications and other high-tech equipment. It would be a tall order, if not outright impossible, for Saudi Arabia to execute a short-term supply pivot overnight if it faced a ban on arms sales. And any ban could be temporary – until Saudi Arabia reconsiders joining Putin.

Perhaps it is worth considering an ancient Russian wisdom ourselves. More than a century ago, the Russian playwright Anton Chekhov warned: “Knowledge is only valuable if you put it into practice. The same may be true for leverage. It has no value if not used.

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