American politics has always been a bi-partisan affair. Two blocks fight each other without taking into account the possible consequences of their decisions on global geopolitics and markets.
The current decisions of the US Senate now put Washington in the same league as the United Kingdom, which is in a political deadlock to Brexit's crisis. At a time when the world looks at a possible downturn in the Gulf of Persia, the US Senate has in all its wisdom decided to increase US pressure on one of its only remaining allies in the Saudi Arabia region. Not only has Washington put Saudi Arabia on a blacklist of countries that do not play a sufficient role in the fight against human trafficking, the US Senate has also voted to block further military agreements with the kingdom. For someone to add a country to a list, it's not a real news feature, but in Saudi Arabia, currently leading the US-sponsored anti-Iran block, it will be seen as a blow to the face. The legal consequences are small, since the countries will normally tear it off without problems, but in a time of regional conflict and possible Iranian military action, the United States needs full support from its golf-based allies.
What makes the situation worse is that, due to a geopolitical-military strategy introduced by US President Trump aimed at the removal of the Iranian regime, the Arabian golfing countries are on the receiving end of Iran's anger. The widespread attacks on tankers in the Oman Gulf, downing by an American drone over Iranian waters, and the continued barring of rockets and drones coming from the Iranian-backed Houthi-controlled areas in Yemen at energy infrastructure and airports, puts Saudi Arabia and UAE as a goal on the front line.
Without US military support, Saudi Arabia, UAE and Bahrain, will be reached by Iran and its proxies, as the Arab military in the Gulf cannot stand up for Iranian aggression. Other partners in the region are Egypt and Israel, but these countries seem to stay out of conflict. Confronting Iranian proxies in the region, Western arms are needed to keep the balance in place and will act as a deterrent to Iranian proxy attacks. The US Senate voted to block new military supplies, and sales to Saudi Arabia could tip the scales over the next couple of weeks. Although President Trump is expected to veto the Senate's decision, the Arab leaders are once again confronted with the inherent political volatility of dealing and relying on Western support. Ever since the Arab spring, already these countries are wondering where their future lies, it will be within the western sphere of influence, or will they look to (far) -East? Washington's behavior can also tip this into a pro-Russia or China move very soon.
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At the same time, European partners, such as Germany and the United Kingdom, also show an increased anti-Arab feeling. After the almost actual German blockade of military sales to the region, the only real strong partner for Saudi Arabia and the UAE, Britain can now also close its military support soon. A British court has ordered that arms sales to the region are illegal, as they are or may be used in the Yemeni conflict, with Saudi Arabia as the main perceived culprit.
The Arabian Gulf States, except Qatar, are now looking for a new arms dealer. For most Arab countries, this move is not only a threatening development, but is also seen in light of the continuing military contracts signed with Qatar, currently a semi-outcast in the Gulf region due to its close relations with Iran and Turkey. . Unilateralism in the United States and Britain and even German strategies is flabbergasting for the Sunni Arab countries in the Gulf and Egypt.
For the United States and the UK, today's move could become a Rubicon situation. Trump needs the Arab support to form a front against Iran, while access to the Arab military is necessary in the event of a military confrontation with Tehran. At the same time, Washington and London must be on the Arabic tables to discuss not only security but also energy policy. By countering people like the Saudi Crown Prince Mohammed bin Salman, Egypt's President Sisi or Abu Dhabi's Crown Prince Mohammed bin Zayed, even an anti-American front may emerge, even within the OPEC + discussions in the coming weeks. So far, US-Western energy security has been incorporated into the OPEC + discussion. The latter can change dramatically soon, and put Riyadh / Abu Dhabi firmly in the corner of Russia for the foreseeable future.
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Without access to defense technology and hardware from the West, Arab nations must find other solutions. The most important provider available is Russia, and its defense industry is more than happy to jump into the gap. By tying Arabian Gulf states and Egypt to Moscow, a new geopolitical reality could arise that threatens the economic and energetic interests of the West directly. All this can happen in a time when the future of the Gulf is in danger and energy markets are very volatile. Western leaders must reassess their approach.
MBS / MBZ and Sisi will not be public and true Trump currently in the media. The Arab leaders are used to playing chess on several levels. It will be very interesting to see the respective oil ministers' views on the coming weeks if the US and Europe begin to complain about oil prices. The Arab reactions will be very icy, while Russia will reap the benefits. Oil and gas analysts should pay close attention to the geopolitical effect on crude oil if Arab producers do not look at supply and demand constraints, but are guided by security threats coming from US senators or British courts. Finally, even for OPEC, "the stream comes out of a gun tank". Looking at the current situation in the Gulf region, this must be taken literally. Trump's party has an elephant symbol, but Arab leaders are like elephants in reality, they will never forget!
By Cyril Widdershoven for Oilprice.com
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