US Pres. Trump with Arab leaders at the Arab Islamic American Summit
The volcanic consequences of the COVID-19 pandemic are reshaping world affairs on various levels. Whether the current shifts in international relations are temporary or permanent is a question that only time and practice can answer. One dynamic of a shifting relationship to observe, during this global tragedy, is the relationship between the United States and Arab Gulf countries. It may not only redefine United States’ foreign policy toward the Middle East, but it could also decide for the economic future of the entire globe. On April 23rd, the American President Trump had a phone call with H.H. Sheikh Mohamed bin Zayed, the Crown Prince of Abu Dhabi, and the de facto leader of the United Arab Emirates. Among other issues discussed on the phone call, Trump asked Bin Zayed to “take steps toward resolving the Gulf rift in order to work together to defeat the Coronavirus, minimize its economic impact, and focus on critical regional issues.” One day before that, on April 22nd, President Trump had a separate phone conversation with Sheikh Tamim bin Hamad Al-Thani, the Emir of Qatar. According to the White House spokesperson, the President encouraged the Emir to take steps to resolve his country's ongoing dispute with neighboring Gulf countries. The “Gulf rift” or “neighbor disputes,” mentioned in the two phone calls, refers to the diplomatic and economic boycott applied against Qatar by the Arab quartet – namely; Saudi Arabia, United Arab Emirates, Bahrain, and Egypt. The boycott is meant to pressure Qatar to stop supporting Islamic terrorist organizations, that have been wreaking havoc, all over the Middle East, and targeting the stability and security of Gulf monarchies, for decades. The boycott was announced at the conclusion of the “Arab Islamic American Summit” in Saudi Arabia, in 2017, which was held a few months after Trump is seated as US President. At that time, President Trump took the side of the Arab quartet against Qatar and blessed the boycott, despite the resound objection from his Department of State. Over years, Trump’s policy to tacitly endorse the Gulf rift and take sides served his goal to revive the American economy. On the margin of the Arab Islamic American Summit in May 2017, US President Trump and Saudi Arabia's King Salman bin Abdul Aziz signed a series of letters of intent for the Kingdom of Saudi Arabia to purchase arms from the United States totaling $110 billion immediately, and $350 billion over 10 years. In addition, the financial investments pumped by Saudi Arabia into the American economy have risen steeply, since then. According to Treasury Department reports, Saudi Arabia increased its ownership of US Treasuries by 83%; i.e. from $97 billion in 2016 to $177 billion in 2019. The two phone calls paid by the American President to UAE and Qatar leaders took place only one day after the shocking historic drop in Texas oil prices, on April 20th, which went as low as ($-40) per barrel. The fall in demand versus surge in supply of oil products as a result of the lockdown, aimed to control the spread of Coronavirus, is one reason for this drop. Another reason is that the United States still needs Middle East oil; not only because of its quality specifications compared to Texas oil, but also because its availability in the US market acts as a shock absorbent to market ebbs and flows. Unlike West Texas Index (WTI) price, the Brent price seems stronger in face of political and economic crises. It has not been affected much with the recent “oil price war” between OPEC+ and Russia, which ended with a historic deal to reduce production by 10 million barrels to survive the economic implications of the pandemic. The United States could not be part of this crucial deal because of complicated US laws and regulations that provide a limited authority to the President to decide on matters related to oil production and distribution. In January, after Iran threatened to target oil fields of Arab Gulf countries, to disturb US economy, President Trump said in a public speech: “Over the last three years, under my leadership, our economy is stronger than ever before, and America has achieved energy independence… We are independent, and we do not need Middle East oil.” Yet, data proves that President Trump’s claims are not true. According to “US Energy Information Administration,” the United States imported 9.10 million barrels per day of petroleum from 90 countries, in 2019. Total of 18% of those imports came from OPEC+, led by Saudi Arabia, while 11% came from Arab Gulf countries. Clearly, the Trump administration has realized that the policy of blessing, or at least ignoring the “Gulf rift,” or taking sides with one Gulf country against the other is not beneficial for the US economy, on the long run. In fact, it may be a dangerous policy, should Gulf countries, at some point, decide to counter-play the cards of oil prices or financial investments to force certain stances or decisions from the US administration. That is particularly possible in light of the many predicaments pressuring the American economy, since the eruption of the COVID-19 pandemic. Now, the reconciliation of Arab Gulf countries and the return of a strong Gulf Cooperation Council have become in the best interest for the United States, economically and politically. We expect to see sincere endeavors by the Trump administration to resolve the disputes in the Gulf, in the next months. Yet, it is Gulf countries’ final call whether to accept Qatar back, despite Emir Tamim’s continuing support to terrorism and working against the wellbeing of his neighbors.
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United States - United Arab Emirates - Saudi Arabia - Qatar - Trump - Mohamed Bin Zayed - Tamim Bin Hamad - Middle East oil - Texas oil - Arab Gulf - Gulf reconciliation - Gulf rift - Economy - international affairs - Coronavirus - COVID-19 - Dalia Ziada