19.09.2023 Author: Salman Rafi Sheikh

Saudi-Israel Rapprochement Reflects Complex Geopolitics

Saudi-Israel Rapprochement Reflects Complex Geopolitics

“There is a rapprochement [between Saudi Arabia and Israel] underway”, announced President Joe Biden in July. If the Biden administration can find a way for Saudi Arabia and Israel to develop relations officially, this will be a significant diplomatic breakthrough. Indeed, successive US presidents have tried – and failed – in ‘normalising’ the Middle East. The Trump administration, however, found an exceptional success when it got the UAE and Israel (and a couple of other Arab states) to sign The Abraham Accords in 2020. Ever since then, the US has been trying to expand the accords by including Saudi Arabia, which is arguably the most important Muslim state in the world. Many believe that if Saudi Arabia ends up developing diplomatic ties with Israel, it could become a springboard for many other states in the Muslim world (e.g., Pakistan) to follow suit. For Washington, this will be one of the biggest foreign policy successes since the Second World War, and probably one key way of re-establishing its clout in the region that it appears to be losing fast to China and Russia, who are steering their own peace process, i.e., China brokered Saudi-Iran deal and Russia brokered Saudi-Syria deal, to increase their influence in the Middle East.

Why is regaining this clout so important for Washington? Washington’s primary purpose – especially, in the context of the Russia-Ukraine military conflict – is to come back in a position where it can influence the global political economy. For the past two years, Washington has consistently failed to convince Saudi to break out of the OPEC+ agreement to increase oil production to bring the oil prices down. But, contrary to Washington’s efforts, Russia and Saudi have once again decided to cut production, causing oil prices to jump. Even a small surge in oil prices causes the energy-dependent West’s inflation rates to jump, which becomes a political issue for the parties in power. For the collective West, a jump in inflation also signals their decreasing global clout. Arresting this decline, therefore, is at the heart of the politics of Saudi-Israel rapprochement.

Another key reason is the imperative of countering China, which has recently given its economic engagement with Riyadh a multi-billion dollar turn. It is increasing its economic footprint throughout the Middle East as an extension of its Silk Road project, which means China, much more than the US, is becoming economically more vital for the Middle East. This is especially happening at a time when states like Saudi are looking for a major transformation away from oil.

Making a deal, therefore, makes sense for Washington because it could bring the latter back into the game. Therefore, Washington is seemingly prepared to accept Riyadh’s key demands, i.e., a civil nuclear programme, a NATO-like security pact, and a resolution of the Israel-Palestine conflict.

But what is it that Washington really wants from Riyadh in return? Reports in the mainstream Western media show that Washington wants Saudi to end its war in Yemen and limit ties with Beijing. The reports indicate that the US is not happy over the prospects of Riyadh conducting its trade with China in Chinese currency. Therefore, while Washington may not necessarily object to Riyadh continuing trade with Beijing, it is going to push for maintaining the supremacy of the US dollar. Doing this holds crucial significance for Washington because both China and Russia consider ‘de-dollarization’ a key part of their project to create a new, multipolar world order away from unilateral US domination.

The problem, however, for Riyadh is that discarding the use of alternative currencies at the behest of Washington amounts to sacrificing its strategic autonomy, which, in turn, can compromise its ambition to become one of the key ‘poles’ in the multipolar world. By defeating ‘de-dollarization’, Riyadh will only be reinforcing financial unipolarity. It also means that Riyadh will remain vulnerable to sanctions.

But the question is: will Riyadh concede ‘de-dollarization’? To understand this, we need to understand how Riyadh views normalisation. From Washington’s perspective, Israel-Saudi normalisation will be a ‘game changer’. But what about Riyadh?

For Riyadh, normalisation with Israel is, first and foremost, a part of other ‘normalisation’ processes (e.g., with Iran and Syria). Many in Washington continue to think Riyadh wants a defence treaty with the US for protection from Iran. But why would Riyadh look towards the US for protection when it already has China as a peacemaker and when both Iran and Saudi Arabia are now inching towards joining BRICS – which could become yet another mechanism for defusing tensions and boosting mutual trade and better ties?

But Riyadh is still interested in a deal with Israel. The question is: what type of deal it is looking to do? Part of Riyadh’s demands include massive concessions for Palestine from Israel, including discarding plans for annexing the West Bank. A deal that does not include this will be a non-starter, for recognising Israel without ‘protecting’ Palestine would translate into Saudi losing its clout in the Muslim world. This is just the exact opposite of what Riyadh is currently looking for. But what Riyadh wants has a major political cost for the Israeli regime, as the latter is itself in a fix over the fact that a deal with Saudia might come at the expense of its ambitions to annex the West Bank. Will it concede? So far, there has been no indication. Riyadh might consider a temporary pause in its support for alternative currencies only if it allows it to extract a deal for Palestine and give a massive boost to its overall standing in the Muslim world. This, however, is the central problem.

What the different – and diverging – interests and perspectives of Washington, Riyadh and Jerusalem show is that the deal is far more difficult to happen than it sounds even if Washington is prepared to meet key Saudi demands. Secondly, ultimately, the deal comes down to whether or not the far-right parties in Israel consider that the benefits of better ties with the Muslim world outweigh any potential losses of giving up the West Bank. Thirdly, even if the deal happens, Washington can never be sure if Riyadh, in the long run, will stay the course of dollarization charted by Washington. Let’s not forget that Riyadh is part of BRICS+, which is actively pursuing a world away from (financial) unipolarity.


Salman Rafi Sheikh, research-analyst of International Relations and Pakistan’s foreign and domestic affairs, exclusively for the online magazine “New Eastern Outlook”.

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