During a briefing last week, the White House press secretary made the remark just as a number of high-ranking American executives were getting ready to attend a major Saudi business conference with thousands of other investors, businesspeople, and politicians. (Democrats teaming up)
The Future Investment Initiative, also known as Davos in the Desert, is scheduled to begin on Tuesday and last for three days. However, following a public and heated exchange of accusations over an Oct. 5 production cut by the oil cartel OPEC Plus, which is co-led by Saudi Arabia and Russia, U.S. officials will be absent.
The cut — which benefits Russia monetarily — frustrated American authorities whose constituents have been battling with rising energy costs from Russia’s intrusion into Ukraine. President Biden warned the kingdom that there would be “consequences” for accusing the Saudis of supporting Moscow in the war.
The tensions do not appear to be deterring American business leaders from attending the conference, some of whom have substantial interests in Saudi Arabia. However, those consequences have not yet been detailed. (Democrats teaming up)
Along with influential investors like Blackstone Group CEO Stephen A. Schwarzman and Bridgewater founder Ray Dalio, the chief executives of JPMorgan Chase, Goldman Sachs, and Wells Fargo all intend to attend. It is anticipated that former Trump administration officials Jared Kushner and Steven Mnuchin, who received significant financing commitments from the main Saudi sovereign wealth fund, will also leave.
Singaporean, Russian, and Nigerian senior government officials are also included.
In a recent interview, Representative Ro Khanna, a Democrat from California who is the sponsor of a bill that would temporarily prohibit the sale of arms to Saudi Arabia by the United States, stated, referring to Russian President Vladimir V. Putin, that “this decision to cut production has been such a slap in the face of the U.S., and such an alignment with Putin, that I think it’s going to again generate bipartisan outrage.”
Saudi officials have said that they were protecting both their own and the group’s economic interests by cutting production. They have denied that this meant they were aligning themselves with either side in the Ukraine conflict. They talked about their ties to Ukraine, including a $400 million aid package that they recently received.
The 2018 murder of Jamal Khashoggi, a Saudi-born dissident, and journalist who was a resident of the United States at the time of his death, by Saudi agents is another source of tension between the Saudi leadership and the Biden administration.
However, in the end, the Biden administration has done little to discourage companies like JPMorgan and Blackstone, which have a long history of doing business in Saudi Arabia, or smaller businesses hoping to attend this week’s forum and get investments from wealthy funders in the kingdom.
In addition to being the setting for a parade of business deals, the conference is also where many investors realize how important it is for the Saudis to meet face-to-face and shake hands as the kingdom strives to become a global center for business and tourism.
Despite widespread allegations of human rights violations, American presidents have maintained good relations with Saudi Arabia for decades, and the country’s enormous oil wealth has kept the U.S. and other Western businesses engaged.
The significance of Saudi Arabia’s $620 billion sovereign wealth fund and increasingly open markets as powerful sources of global influence is exemplified by the interest in this year’s conference. Because of the enormous opportunities Crown Prince Mohammed bin Salman, the de facto leader of Saudi Arabia, can provide, businesspeople and investors are delighted to mingle with him. Many of them have chosen to focus on his efforts to open up the economy and loosen social restrictions rather than his growing crackdown on domestic dissidents.
Unless the United States drastically alters its policy, which analysts believe is unlikely, such as cutting diplomatic ties or imposing sanctions on the Saudis, these business relationships are likely to continue. (Democrats teaming up)
Karine Jean-Pierre, the press secretary for the White House, reminded American businesses to consider “reputational concerns that can arise from public policy choices made by host countries” when deciding where to invest last week.
Nevertheless, the Saudi conference’s organizer, Richard Attias, made it a point to inform reporters in Riyadh, Saudi Arabia, last week, that his team had begun turning down American requests for attendance due to a lack of space.
In the same time, in the weeks since he issued the warning, Mr. Biden’s strategy for dealing with the potential consequences for Saudi Arabia has remained hazy.
Concerns that the kingdom has assisted its citizens in fleeing the United States after committing violent crimes have caused Senator Ron Wyden, a Democrat from Oregon, to delay the appointment of Michael Ratney as his choice for ambassador to Saudi Arabia.
Mr. Khanna and other members of Congress have pushed for legislative changes since the OPEC Plus decision to punish Saudi Arabia. These changes include a one-year ban on all sales of weapons and munitions and an initiative called “NOPEC” that would allow the Justice Department to sue the cartel for alleged anticompetitive practices. (Democrats teaming up)
Almost certainly, some members of Congress will object to negotiations that began under the Trump administration to allow the kingdom to use American technology to build nuclear power plants. Any such agreement needs to be approved.
A few legislators have likewise required a withdrawal of the American powers from Saudi Arabia, where there are right now under 3,000 soldiers.
However, each of these measures has drawbacks.
According to the Stockholm International Peace Research Institute, Saudi Arabia is the single largest importer of American weapons. Losing that business could hurt American manufacturers like Lockheed Martin and Raytheon Technologies and even lead to layoffs at a time when the economy is struggling.
It is unclear how foreign oil production judgments would be enforced even if OPEC lost its current legal protections under U.S. law. Additionally, American troops are stationed in Saudi Arabia for a number of reasons, one of which is to safeguard American interests abroad by acting as a buffer against any potential Iranian aggression in the future and to defend allies like Israel in case of need.
Saudi Arabia hosted President Donald J. Trump’s first state visit in 2017 and forged a closer alliance with the United States under the Trump administration. Deals worth billions of dollars were made between the two nations, including Saudi Arabia’s purchase of sophisticated American weapons.
Mr. Kushner, the son-in-law of Mr. Trump and a former senior Gulf policy adviser, came to rely on the Saudi crown prince as a partner in peace efforts in the region and occasionally assisted in shielding him from criticism.
However, Mr. Biden’s tone has been more aggressive.
On the campaign trail in 2019, Mr. Biden referred to the kingdom as a “pariah” nation, and he made public intelligence reports from the United States that indicated that Prince Mohammed had authorized Mr. Khashoggi’s murder.
In an effort to cut off aid for the Saudi-led war in Yemen against the Iran-backed Houthi rebels, Mr. Biden also banned sales of offensive weapons to the kingdom shortly after taking office.
However, the political calculus was altered as a result of Russia’s invasion of Ukraine, which prompted the United States and its allies to impose severe sanctions on Russia, reducing energy supplies to the West. (Democrats teaming up)
Mr. Biden finds himself in a predicament now, just a few weeks before the contentious midterm elections on Nov. 8.
Kristian Coates Ulrichsen, a Middle East fellow at the Baker Institute for Public Policy at Rice University, stated that Prince Mohammed “is making it very clear that he will act on whatever he perceives to be the best interests of Saudi Arabia.”
Given that American officials positioned Mr. Biden’s visit to the kingdom in July as an effort to increase Saudi cooperation on energy policy, this places him in a difficult position. The president met with Ruler Mohammed and traded a genial clenched hand knock, trying to fix relations in order to win consent to increase oil creation. (Democrats teaming up)
Saudi Arabia humbly expanded its creation in July and August, helping lower costs at the service station. Yet, the possibility of a worldwide downturn, which could push down global interest in oil and drive down costs, drove the realm to reconsider and attempt to secure benefits while it could, preparing for the radical creation cut reported in Oct.