Inside the Saudi-U.S. Rift

For years, whenever Saudi Arabia and the United States bickered over Middle East policy, the relationship never seemed dangerously strained. The two sides have frequently clashed over Israeli settlements in the West Bank, a solution to the Syrian civil war and Washington’s efforts to ink a nuclear deal with Riyadh’s rival, Iran. But what held the alliance together, most assumed, was an immutable mutual dependence: The U.S. needed Saudi oil, and the kingdom needed American security.

Today, that line of reasoning appears to be wearing thin. As President Barack Obama meets in Riyadh with King Salman on Tuesday, the two leaders will be discussing a once-expansive relationship that has been relentlessly whittled down by deep and abiding differences over Middle East policy. Not only do the U.S. and Saudi Arabia have profound disagreements on Syria, Israel and Iran, but over the past few years Riyadh has been charting its own foreign policy path, coordinating with Washington only when it serves Saudi interests. King Salman, Riyadh’s new monarch, is expected to continue this policy that began under his predecessor, King Abdullah, who died last week. “The relationship is now transactional,” says Charles W. Freeman Jr., a former U.S. ambassador to Saudi Arabia. “The main question now is what’s in it for them.”

Such hard-nosed realpolitik is a long way from the days when the relationship between the U.S. and Saudi Arabia brimmed with good will and overlapping interests. Since the end of World War II, when President Franklin D. Roosevelt first met King Abdel Aziz ibn Saud, the founder of the kingdom, aboard a U.S. Navy destroyer in the Suez Canal, the relationship centered on the exchange of Saudi oil for U.S. guarantees to protect the kingdom.

Relations deepened during the Cold War, when Washington and Riyadh collaborated against Soviet-backed Egyptian forces in Yemen’s civil war in the 1960s and later conspired to arm the Afghan mujahideen against occupying Soviet soldiers in the 1980s. Before the Iranians got involved, it was Saudi money that allowed aides to President Ronald Reagan to get around a congressional ban on funding the anti-communist Contra rebels in Nicaragua. The Saudis allowed some 500,000 American troops to be stationed inside its borders in preparation for the first Iraq War. And when the global price of oil periodically rose to levels that threatened U.S. economic growth, successive U.S. presidents could count on Saudi Arabia to increase production and ease the pain at the pump.

Today, such Saudi gestures largely belong to a bygone era. The relationship suffered a devastating blow when it turned out that most of the 9/11 hijackers were Saudis. Despite the sworn enmity between Al-Qaeda and the Saudi royal family, some Americans still suspect official Saudi support for the terrorists.

If U.S. attitudes toward Saudi Arabia changed after 9/11, Riyadh’s confidence in U.S. security guarantees dimmed with the 2003 American invasion of Iraq. King Abdullah watched as his predictions of growing Iranian influence in the region came true. In response, Riyadh eliminated its subsidy for transporting oil to the North American market. Within months, China became Saudi Arabia’s chief customer. “They downgraded us,” Freeman said. “We were a very acceptable and desirable security partner so long as we had no imperial agenda of our own in the region.”  

In addition to President George W. Bush’s blunder in Iraq, Obama disappointed the Saudis by backing away from his threat to bomb Syria and failing to push harder for an Israeli-Palestinian peace plan put forward by King Abdullah. “We’re no longer the partner we once were," Freeman said. “The Saudis don’t think they owe us very much of anything.”

At the same time, the Saudis have shown they’re willing to fund their friends. When Arab Spring protests erupted in Egypt in 2011, Riyadh was furious with Obama for failing to support the country’s embattled strongman, Hosni Mubarak, a U.S. ally for more than 30 years. Riyadh’s anger only intensified when the Obama administration embraced Mubarak’s successor, Mohammed Morsi, the leader of Muslim Brotherhood, a group that is banned in Saudi Arabia. So when Egyptian Gen. Abdel Fatah al Sisi overthrew Morsi last July and then replaced him as president, Saudi Arabia lavished him with $12 billion in unconditional aid. By contrast, Congress appropriated $1.5 billion in mostly military aid to Egypt last year, but Obama held up distribution for several months because of Egypt’s poor human rights record.

Last year, Saudi Arabia also gave Lebanon $3 billion to modernize its military so it could confront Iran-backed Hezbollah, the country’s most powerful militia and political party. And in a pointed message to the United States—which provided Lebanon with only $75 million—Saudi Arabia stipulated that the Lebanese government had to buy the military equipment from France.

Another change in the relationship involves U.S. overflight rights. Saudi authorities used to grant U.S. military aircraft near-blanket permission to fly over Saudi territory on their way to East Asia. Now, said one U.S. official, who spoke to Newsweek on the condition of anonymity, “they periodically withdraw permission to remind us it’s their airspace,” forcing the American planes to add hours and thousands of miles to their flights as they avoid the Arabian peninsula.

Saudi Arabia’s new independence in foreign policy also extends to trade as Riyadh moves to diversify its commercial relations. In 2013, U.S. exports to Saudi Arabia totaled $19 billion, down from $25 billion in 2012, according to the office of the U.S. Trade Representative. A report from the Economist Intelligence Unit attributed some of the decline to Saudi Arabia’s shift away from big American-made gas guzzlers to cheaper Chinese cars.

Some Americans see a bright spot in the decision by Saudi Arabia — the world’s largest oil exporter — to maintain its production levels in the face of falling oil prices. But the Saudis are not doing the United States any favors. Riyadh, which can fall back on its enormous cash reserves, not only wants to see the low prices punish rivals Iran and Russia for their support of Syria; it also wants to cripple competition from the U.S. shale oil industry.

The one area where U.S.-Saudi cooperation is flourishing is in counterterrorism. When Obama launched the first sorties of the bombing campaign against so-called Islamic State militants in Iraq and Syria, Saudi Arabia scrambled its fighter jets to join in the air strikes. Saudi Arabia is also hosting a training camp for Syrian rebels and a small base for U.S. drones. Intelligence sharing has never been stronger.

But the coup in neighboring Yemen last week that toppled the pro-U.S. government and saw the rise of the Shiite Houthi movement now presents Obama and Salman with a fresh set of challenges. With the Houthis allegedly close to Iran, Saudi Arabia feels caught in a Shiite pincer. At the same time, both the U.S. and Saudi Arabia are concerned that any breakup of Yemen will take pressure off the country’s Al-Qaeda affiliate.

The uncertain situation in Yemen represents a major setback for both U.S. and Saudi efforts to stabilize the nation. With the Houthis now the dominant power in Sanaa, Riyadh has cut off funding to the Yemeni government and is bolstering its border defenses to contain any spillover of violence into the kingdom.

Bernard Heykal, a Middle East expert at Princeton, hopes that Obama will try to convince King Salman not to rule out talks with the Houthis. “One way in which American can play a very productive role in the region is to encourage the Saudis to reach out to all Yemeni factions, including the Houthis,” he told NPR Monday. “That would be one way of stabilizing Yemen.”

Amid the new climate of distrust, much will now depend on whether the Saudis can muster the confidence that Obama knows what he’s talking about. Then again, they just might conclude they’re better off taking their own advice.