Saudi Arabia’s Crown Prince Mohammed bin Salman and UAE’s Sheikh Mohammed bin Zayed al Nahyan have long been key figures in global oil production. However, they may now be facing a shift in their relationship with the U.S., especially under a potential second term of President Donald Trump. This comes at a time when OPEC+ – the oil cartel comprising both countries and others like Russia – made significant decisions during its December 2023 meeting. They postponed a planned rollback of 2.2 million barrels per day (bpd) in production cuts, originally set for January 2024, until April 2024. Additionally, a further 3.6 million bpd in cuts has been extended until the end of 2026, from its previous expiration date in 2025.
With the potential return of Trump to the White House, the future of OPEC+ relations with the U.S. could change drastically. The former president has made no secret of his disdain for the oil cartel and several Saudi policies, notably the Kingdom’s shift in alliances with China. Trump’s frustrations with Saudi Arabia trace back to the 1945 U.S.-Saudi oil deal, where the U.S. agreed to provide security in exchange for oil supplies at a reasonable price. However, Saudi Arabia’s actions in 1974 and 2014-2016, particularly raising oil prices and challenging U.S. shale oil, have led to tense relations.
Trump’s position on oil during his presidency revolved around maintaining oil prices within a specific range – $40-45 per barrel as the floor and $75-80 per barrel as the ceiling. This range was designed to protect U.S. shale oil producers while benefiting the broader U.S. economy. Despite this, Saudi Arabia’s coordination with Russia within OPEC+ aimed to push prices higher, which Trump criticized, asserting that the U.S. was unfairly protecting these nations while facing high oil prices.
Trump’s approach to the Middle East has always involved using oil as a tool of leverage. He has viewed Saudi Arabia, and to a lesser extent the UAE, as key players in countering Iran’s influence in the region. By maintaining these alliances, Trump aims to limit Iran’s power, which could be a significant part of his second-term foreign policy. Additionally, Trump’s strategic shift focuses on bringing these countries closer to the U.S., reducing their growing ties with China.
Saudi Arabia and the UAE’s drift toward China since Trump’s first term has had major consequences. This shift allowed OPEC to push oil prices higher, which negatively impacted U.S. allies and caused global inflation. China, having secured long-term agreements for oil at discounted prices from countries like Iran, Iraq, and Russia, insulated itself from rising energy costs. Moreover, China’s deepening presence in the Middle East, including covert military involvement, has raised alarms for the U.S.
Trump’s unpredictability has always been a key asset in his foreign policy. His blunt, unpredictable rhetoric – often described as “crazy” – is seen as a deterrent to both China and Russia. This unpredictability, combined with his strong control over the U.S. government, has positioned him as a powerful figure capable of reshaping global alliances. His second term, should he win, would likely involve a mix of sanctions, strategic threats, and economic inducements to shift OPEC+ countries back into the U.S. orbit.
With Russia’s faltering presence in the Middle East and China’s economic challenges post-COVID, the U.S. may have a unique opportunity to reassert influence. By offering both military and economic support to key Middle Eastern nations, Trump could further erode China’s foothold in the region and reshape the global oil market to the U.S.’s advantage.
As OPEC+ faces internal challenges and global oil prices continue to fluctuate, the future of Saudi Arabia, the UAE, and the broader oil cartel’s relationship with the U.S. will likely hinge on the outcome of the 2024 U.S. election. The next few months could prove pivotal in determining the trajectory of oil production, geopolitical alliances, and global economic stability.
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