Who really controls global oil prices? Or, perhaps, rather, who should? It’s the question that journalists and pundits have been scrambling over in recent weeks, as we see oil prices tumble to all time new lows forcing some US shale producers to go bust, while Saudi Arabia sent a record number of tankers to the shores of the United States.

The crisis was finally subdued when both Saudi Arabia and Russia agreed to back down from their price war, after Trump intervened. But two myths were immediately evident during the peak of the crisis where the world was gripped by the consequences of 25 dollar a barrel oil – a collapse in the shale oil industry in America – and what a Texas senator described as “war” between the Saudis and the state of Texas (the Houston area is poised to lose some 300,000 jobs).

First, that America, under Trump, more or less controls the global price of oil through a nod and a wink; and second, that Trump’s relationship with the Saudis, in particular, the young Crown Prince Mohammed bin Salman (MbS), is strong.

Trump paid the price of being a habitual liar when he claimed that the new oil deal struck by OPEC+ members was his genius. In fact it was, but the fable of boy who cried wolf applied, so that many don’t attribute it to him.  He called both the Russian President and the Saudi Crown Prince and convinced them both on the spot to stop their price war which had produced so much crude oil that it was creating logistical problems in the US simply to store it.

Yet the crisis threw a spotlight on his personal friendship with MbS and has raised new questions over how this crisis could have happened in the first place, what the new threat is now from Iran (created by a strained Trump-MbS relationship) and what we can expect in the Middle East in the coming months.

MbS has humiliated Trump by not being entirely subservient to the US president’s demands on oil and regional security.

Trump’s once amiable, if not endearing, friendship with MbS is long over. The Saudi Crown Prince has humiliated Trump on many occasions by not being entirely subservient to the US president’s demands, both on oil and regional security. In an almost replicated scenario, not unlike Putin and Assad, Trump feels betrayed by the Saudi Crown Prince as it was after all the neat work of Jared Kushner who organized the reshuffle in the Saudi royal architecture which paved the way for MbS to become Crown Prince in the first place in June 2017.

Trump loves simple deals. Widely overlooked but not forgotten were the leaked memos at the time exposing the simplest of all deals struck by his son-in-law with MbS, essentially promising to make him the Crown Prince for acknowledging the state of Israel and the deal to come with regard to the Palestinians.  And as a cherry on the top of the pact, Kushner even threw in some incendiary intelligence from the CIA which showed MbS a list of all his enemies who were plotting against him.

But the deal has gone sour. Just like Assad forgetting that Putin was the one who saved him from toppling, MbS also has a short memory and can’t remember who put him as the effective leader of the Saudi Kingdom. What we are witnessing now is Trump losing his patience and teaching the young prince a lesson about power.

Trump knows if he can’t steer the prince in the direction he wants on hugely important subjects like oil production, he faces a rebellion back home with Republican heavyweights who will destroy him if the energy sector in states like Texas is affected. This recent oil war actually resulted in one large energy firm going under and the fiasco of a number of gas stations actually selling gasoline at a loss simply to dump it.

This was as much a wake-up call to Trump about how dangerous the capricious young Crown Prince can be to his survival in office, as anything which shocked regional experts before it, like the Khashoggi murder, the Qatar blockade, or even the kidnapping of Hariri.

It is reported that Trump told MbS that if he didn’t cut oil production, the US would pull out its troops in Saudi Arabia.

And so the call was made, a telephone call, which was so magnanimous if not threatening to the Saudi Crown Prince, that MbS asked his aides to leave the room while Trump continued. On April 2, it is reported that Trump told MbS in no uncertain terms that if he didn’t cut production, then he would pull out US troops and the military infrastructure in Saudi Arabia, which have been there for 75 years.

Of course, Trump presented it as something he would be under pressure to do by the US Congress back home. But the threat was clear enough.

Remarkably, it took MbS ten whole days to agree and climb down. But those days must have sown the seeds of discontent and vitriol now between Trump and MbS – both men known to be easily upset by not getting their way.

MbS, it is said, did not intentionally start the price war with Russia. And this is stated by a number of oil experts. But the fact that the crisis came so close to toppling Trump indicates how his own clumsy handling of such gargantuan matters is finally getting noticed by the White House.

The special relationship between these two men was always a myth anyway. In reality they didn’t gel. The real friendship is between Kushner and the Crown Prince, not with Trump. In fact, just recently, in the latest panic attack that MbS had about his own standing as heir to the throne, where he arrested four key adversaries, analysts say this was due to him receiving reports that these individuals were planning a coup against him, with the support of the Trump administration.

Both Trump and MbS are panicking about their own positions and wield on power. But this is hardly likely to draw them closer.

Yet now a new problem arrives with the stability of the entire region as MbS toes the line on Trump’s instructions. What happens now to MbS? Does he keep his cool and concentrate on not making any more blunders in the region to enrage the Iranians, while he tries to impress his own royal court whose doubts continue to grow?

Iran attacked Saudi oil installations and proved they have the military capability to do it and shown how vulnerable the Saudis are.

The real risk now is that MbS attempts to do something to claw back a contingent of credibility among his peers, which is worrying. With only months away from a US presidential election campaign gaining full steam, Iran may now choose to play its ace and walk away from the card table with all the cash. Once before, Iran attacked Saudi oil installations and proved two important points: one, that they have the military capability and nerve to actually do it; and two, how incredibly vulnerable the Saudis and their oil installations are.

Trump Takes Back the Missiles From the Saudis

Can Saudi Arabia or even the Trump administration sustain one more attack?

Just recently alarm bells started ringing in the Middle East by Saudi Arabia’s neighbors when what looked like a relatively normal procedure took on a news spin all on its own. Trump chose to remove two of the four huge “Patriot” batteries which he put on Saudi soil in the Prince Sultan Air Base to boost up its defense against the Iranian missile which hit the refineries in September 2019.

Could this be a routine measure for “upgrading” the missile, as reported? The paranoid Saudi Crown Prince is unlikely to think so, following the April 2 telephone call which told him in no uncertain terms who was boss. And given that he is led to believe that Trump’s people were at the very least in talks with four royal adversaries, he may well be looking at Trump now as an enemy.

The chief worry is not only that the friendship is over between the two but that both men now know one another’s Achilles heels.

The chief worry is not only that the friendship is over between the two but that both men now know one another’s Achilles heels. For Trump, it is simply Saudi Arabia’s over production; for MbS, it is his dependency on America to protect the country from the very real threat of Iran strikes. Given that Iran has been desecrated by US sanctions and that its only way of hitting back now is to either block the Strait of Hormuz, or simply attack Saudi oil installations with low tech drones, with devastating impact on oil productivity – an Iran strike may be exactly what Trump wants.

Unfortunately, MbS has a poor track record of sound judgement. Barely a month passes when he doesn’t make a massive blunder in the region. It is little reported, but just recently the Crown Prince was suspected of being behind a second cyber attack on Qatar, this time via a fake video created to look like a coup was under way in the energy rich peninsula. The video, and the bots on Twitter which pushed it, was also swiftly reported by the Saudi state-owned Al-Arabiya network – before the tweets were deleted.

MbS desperately needs a victory, to sustain his credibility, to offset criticism of a trail of havoc his decisions have left.

MbS desperately needs a victory, to sustain his credibility, to offset criticism of a trail of havoc his decisions have left. Unfortunately, both his and Trump’s recklessness is about to reach a climax as it is only a matter of time when the political pressure on Tehran reaches fever pitch to avenge the US assassination of Qassem Soleimani. And what better way to do it, than for Iran to strike at both Saudi Arabia’s and America’s weakest spot.

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* The views expressed in this article are the author’s own and do not necessarily reflect the views of Inside Arabia.

 

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