Commodities, Emerging Markets, Energy, Frontier Markets

The Saudis Want To Put “Their President” In The White House – OpEd

By Viktor Mikhin

U.S. President Barack Obama (right) walking and shaking hands with Saudi's King Abdullah (left).  Photo courtesy of the White House.

U.S. President Barack Obama (right) walking and shaking hands with Saudi’s King Abdullah (left). Photo courtesy of the White House.

Politics, as we know, is closely linked to the economy and in many cases is in line with the economic practice that a certain State professes. This strong connection is clearly seen in the development of the last cycle of falling oil prices. First and foremost the country who began to cut prices was Saudi Arabia. Many reasons have been put forward for the new and seemingly quite unexpected course of Riyadh. But if you carefully analyze the political events of the year and Saudi-American relations in general, it turns out there is nothing unexpected here.

As known, Washington during the so-called shale revolution ceased to require Saudi oil as before, and even rivaled the Saudis in this respect. In addition, the Obama administration has begun to flirt with the Iranian ayatollahs and, apparently, decided to bet on a politically and economically stronger Iran. Here it is necessary to pay attention to the return of Tehran to world politics after the election of the moderate and pragmatic Hassan Rouhani to the presidency. Iran ranks second in the world in natural gas reserves and third in oil reserves, in connection with which in is quite capable of changing the balance of the energy game in the Middle East. The education level of its eighty million people is not inferior to the West, and its complete return to the global economic system will be a very important event.

Quite naturally, this was immediately felt in Riyadh, where according to some power is increasingly being assumed by relatively young technocrats as the 90-year-old King Abdullah becomes more sick and elderly. The Saudis, perhaps for the first time since 1945, when an agreement was reached between US President Franklin D. Roosevelt and Saudi King Abdul Aziz bin Abdul Rahman ibn Faisal Al Saud (Ibn Saud) on a strategic alliance, clearly understand that now they have to take care of themselves and of their enormous oil revenues. Then, under the agreement, the United States guaranteed the continued support of the Saudi royal family and the oil company Aramco so long as they provided an uninterrupted supply of “black gold”. These relationships remain almost completely intact, despite the ups and downs due to the Israeli-Palestinian conflict. But now Washington has gradually begun to depart from the unconditional support of Riyadh and the reasons, as already mentioned, are numerous.

One of the steps taken by the Saudis was a sharp decrease in oil prices by maintaining the production level of “black gold”. The kingdom has one of the world’s lowest breakeven points per barrel compared with the United States, where the breakeven point of shale oil is in the range of 50-80 dollars. The day is near when shale will no longer be developed, and the Saudis, having newly entering the US oil market, will dictate monopoly prices. In addition, in Riyadh young princes striving for power are trying hard to implement a plan to capture not only the US oil market, but also have a serious, if not decisive, importance in the political system, including influence in the US presidential election in two years.

At the same time, the Saudis are well aware that if they help their ally get elected, while spending during the campaign tens of billions of dollars (in US banks there are about 1 trillion Saudi petrodollars), the future owner of the White House will quite naturally be grateful to its assistants and is unlikely to permit the next stage of the shale revolution. To some extent, the Saudis now want to repeat the successful oil embargo plan, which was implemented back in 1973 and which still resulted in a positive shift by Washington toward the Arabs, headed by Saudi Arabia. Is this feasible now, or will vaunted American “democracy” still prevail?

All of this will be known after some time, but now we will examine what institutions and policies the Saudis possess in the United States. It should be mentioned that US law prohibits direct lobbying by foreign governments. Nevertheless, effective mechanisms have been developed to allow foreign countries to pursue their interests in the political arena of the United States and have an impact on the formation of American foreign policy and American elections. The Saudi direction of Washington’s foreign policy is an excellent example of this kind of lobbying, as the strong ties established in the second half of the twentieth century between American leadership, American energy companies, and oil-producing Gulf monarchies, led by Saudi Arabia, granted the latter the opportunity to use its financial and oil resources to influence American policy in the Middle East.

According to some American researchers, despite the fact that the Arabian monarchy’s security is largely dependent on American support and American arms supplies, over the years they have managed to work out such a course of action in dealing with Washington, that it is even possible to talk about the subordination of certain areas of American foreign policy (mainly in the fields of energy, security, supply of weapons, relations with the countries of the region) to the interests of the Gulf states, especially Saudi Arabia. Over many years of close cooperation Saudi Arabia managed to put together an entire army of lobbyists, which functions as a well-organized and extensive network. Through these lobbyists different types of issues are resolved, ranging from the procurement of heavy weapons to transactions in the field of oil production and export. With the help of their lobbyists the Saudis have also had the opportunity to influence the political life of the United States.

It should be emphasized that Republicans have always been particularly close to the Gulf Arab countries. But we should not forget that according to tradition, no party has been in power for more than 8 years (two terms for a president) and now comes the Republican Party’s turn. According to US media reports, Saudi Arabia is actively cooperating with Qorvis Communications, which by hook or by crook takes desperate measures to improve the image of the kingdom in the United States. Over the past ten years, the company has received $60.3 million from the Kingdom and continues to provide services to Saudi Arabia in the media sphere.

One of the first projects was of Qorvis to create short television and radio stories (lasting 30-60 seconds), which focus on US-Saudi friendship and the monarchy’s commitment to the fight against terrorism. At the same time, it organized a carefully prepared meeting of representatives of the Saudi ruling family with American journalists, as well as interviews and public appearances. In addition to targeted PR-campaigns, Riyadh needed to actively work with members of Congress and party leaders. To attract “allies” from the Democratic Party, it hired the firm Patton Boggs.

It has continued to work for Saudi Arabia over the last ten years, regularly receiving from the Saudi rulers tens of millions of dollars. On the Republican side the interests of Riyadh in Washington are represented by the Loeffler Group, led by former Republican member of the House of Representatives from Texas and one of the closest associates of John McCain, Thomas Loeffler, who earned over only a few years $10.3 million for providing lobbying services to the Arabian monarchy. In total, on the conclusion of Mitchell Bard, a specialist in the study of Arabic lobbying, over the last ten years Saudi Arabia has retained the services of more than twenty American lobby firms, consultants, and law firms, spending several hundred million dollars.

In addition to direct payments, Saudis regularly provides a systematic supply of oil at a significant discount. In particular, US corporations, to which Saudi Aramco sold oil at a discount, were more willing to provide financial support for those in Congress who were members of the House Armed Services Committee and the US Senate Committee on Foreign Relations, whose activities are of considerable interest to Saudi Arabia. Analysts believe that the preferential treatment from Saudi Aramco was received by exactly those oil companies that are more active in supporting the members of these committees.

In this case, such financial support did not look so much in absolute terms, most of the funds are distributed through the funding of so-called Political Action Committees – structures that allow both private individuals and legal entities to spend money on lobbying or various political objectives.

It should be said that the first lead an attack on Washington was the notorious Saudi Prince Bandar, who at a press conference specifically pointed out that a Saudi turn away from the United States would be “very significant” because Riyadh no longer wants to find itself in situations where it is dependent on the actions or inactions of Americans.

In connection with the development of the “new situation”, stressed the Saudi prince, Saudi diplomats will receive an order to drastically reduce their contacts with their American counterparts, reducing them to the absolute minimum.

In addition, the Kingdom will begin to look for alternatives to the United States as the main partner in the oil industry and the main supplier of arms for its army. When in 1982 Prince Fahd ascended to the throne, he did not forget his previous merits and appointed Bandar as ambassador to Washington. He served at this post for nearly 22 years, and became his own man not only in the highest circles of the American elite, but also made ​​friends with the family of President Bush, especially with the younger Bush.

As some journalists described Bandar at the time, he always had a pleasant smile, flattering look in the eye, generously distributed various humanitarian funds, and simply gave the “necessary Americans” huge amounts of money and lavish gifts in the form of diamonds. The Saudi ambassador, as witnesses recalled, was his own man in “the necessary American ministries and official institutions, where he enjoyed free access, unlike other foreigners”. In Washington they still remember the numerous chic receptions that Bandar rolled out for any occasion. Quite naturally, the entire American elite attended them, and Bandar calmly, treating his counterparts to caviar, arranged the affairs he needed.

Of particular note is Bandar’s “disinterested friendship with the Bush family, and especially with the younger Bush, for which he was nicknamed Bandar Bush. The parents of this US President – George (also a former president) and Barbara, were for Bandar’s wife Haifa “just like Mom and Dad”. The princess used to say that if she needed something, she immediately called “her American parents”. By the way, the only people Barbara Bush allowed to smoke cigars at her home were her son George and Bandar.

As former head of the CIA, Bush Sr. valued in Bandar his passion for covert operations and various combinations in eastern style. It is quite obvious that the Saudi generously paid his American friends for such “friendly sentiments”. For example, he officially donated to the library of the George HW Bush alone several million dollars.

As American journalists calculated, to the family of Bush junior alone the Saudi ambassador handed over tens of millions of dollars under various pretexts. This example eloquently suggests that in the future, by generously donating to the campaign of a Republican president, another Saudi prince will once again try to win over the mighty United States. It is this approach, according to the Arab press, that can save the current Saudi regime and prolong its existence.

The statements, views, and opinions expressed in this article are solely those of the author and do not necessarily represent those of EMerging Equity.

Courtesy of New Eastern Outlook (NEO)

The New Eastern Outlook provides a detailed analysis on the current state of affairs in the Middle Eastern and Asian countries.  For more information, please visit


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