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Begin New Search Topic Oil Content Type Policy Brief Publishing Institution The Washington Institute for Near East Policy Publication Year within 10 Years Publication Year within 25 Years

1. Biden Sees Oil as Key to His Visit, but Does Riyadh Agree?

Author:
Simon Henderson
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
The administration has signaled its intentions for the trip well in advance, but the realities of Saudi oil capacity and global energy forecasts should temper any U.S. expectations of a quick fix. The centrality of energy security to America’s historical relationship with Saudi Arabia is under strain. When Saddam Hussein invaded Kuwait thirty-two years ago and threatened nearby Saudi oil fields, King Fahd ignored the pleas of cautious senior princes who wanted a delay to discuss the issue and instead requested Washington’s immediate help—which he quickly received in the form of half a million U.S. troops and a multinational force. It was a perfect illustration of the longstanding strategic understanding between the two governments: Saudi Arabia will supply the world with oil, and the United States will defend the House of Saud.
Topic:
Economics, Oil, Joe Biden, and Energy
Political Geography:
Middle East, Saudi Arabia, North America, and United States of America

2. Defining a Mature, Balanced Relationship with Saudi Arabia: An Urgent Task for the Biden Administration

Author:
Dennis Ross and Robert Satloff
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
A revamped approach to the alliance should stay focused on shared goals, from ensuring a stable oil market to promoting a more tolerant version of Islam at home and abroad. In the fourth in a series of TRANSITION 2021 memos examining the Middle East and North Africa, Dennis Ross and Robert Satloff discuss the U.S. relationship with Saudi Arabia. Over the past four years, the Trump administration embraced Riyadh almost unconditionally, looking the other way even after outrages such as the killing of journalist Jamal Khashoggi. But now, the Biden administration has vowed to “reassess” the alliance, adopting a posture informed by American interests and values alike. A more balanced approach makes sense, the authors contend, recognizing the fundamental U.S. interest in the direction of social and economic reform underway in the kingdom. Such a policy should stay focused on shared goals, from ensuring a stable oil market to pushing back against Iran, promoting Arab-Israel normalization, preventing nuclear proliferation, countering terrorism, reducing or ending regional conflicts, and encouraging a more tolerant version of Islam at home and abroad. The authors add that “while there is a role for punitive steps in response to outrageous actions, measures implemented out of appropriate context or imposed in a way to cause public embarrassment have the potential to trigger a backlash within the kingdom that could diminish U.S. influence, slow the pace of reform, or both.” In the coming weeks, TRANSITION 2021 memos by Washington Institute experts will address the broad array of issues facing the Biden-Harris administration in the Middle East. These range from thematic issues, such as the region’s strategic position in the context of Great Power competition and how to most effectively elevate human rights and democracy in Middle East policy, to more discrete topics, from Arab-Israel peace diplomacy to Red Sea security to challenges and opportunities in northwest Africa. Taken as a whole, this series of memos will present a comprehensive approach for advancing U.S. interests in security and peace in this vital but volatile region.
Topic:
Diplomacy, Oil, Alliance, and Joe Biden
Political Geography:
Saudi Arabia, North America, United States of America, and Gulf Nations

3. Eight Reasons Why the United States and Iraq Still Need Each Other

Author:
David Pollock
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
A host of crucial multilateral interests are baked into the U.S. presence, from keeping the Islamic State down, to protecting vulnerable regional allies, to preventing Iran from taking Iraq's oil revenues. The assassination of Qasem Soleimani has brought the tensions in U.S.-Iraqi relations to a boil, with militia factions strong-arming a parliamentary resolution on American troop withdrawal and various European allies contemplating departures of their own. Before they sign the divorce papers, however, officials in Baghdad and Washington should consider the many reasons why staying together is best for both them and the Middle East.
Topic:
Oil, Bilateral Relations, Islamic State, and Qassem Soleimani
Political Geography:
Iraq, Iran, Middle East, Israel, Jordan, United States of America, and Gulf Nations

4. Don’t Count Out U.S. Oil Production as a Market-Shaper

Author:
Patrick Clawson
Publication Date:
03-2020
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
Total U.S. production from all sources will remain the world’s largest no matter how low prices go, leaving Washington (and Texas) with considerable room to help domestic companies and press Riyadh and Moscow on stabilizing prices. Five years ago, U.S. shale production costs were so high that whenever oil prices dropped, the impact was felt first and foremost by American producers. Many commentators and media sources assume that is still the case, but the situation has changed dramatically. A recent IMF report with the dry title “The Future of Oil and Fiscal Sustainability in the GCC Region” listed the “breakeven price” for various sources of crude. Naturally, Gulf oil had the lowest cost at $18 per barrel, but the shocker was that U.S. shale came in second place at $22—50 percent below the average deepwater project, 80 percent below Canadian oil sands, and 90 percent below Russian onshore projects. Since costs vary widely, some projects presumably have a much lower breakeven price and some much higher, but the general findings are nonetheless striking. If the IMF is correct, then U.S. production should not be counted out, since the cost fundamentals are on its side. To be sure, the current market structure is not on U.S. shale’s side. Small U.S. producers have to raise money on financial markets and cannot rely on the deep government pockets available to producers in Russia and OPEC states. As a result, many are staring at a very dire situation.
Topic:
Oil, Natural Resources, Global Markets, Business, and Domestic Politics
Political Geography:
North America and United States of America

5. Beyond the Ceasefire in Libya

Author:
Anas El Gomati and Ben Fishman
Publication Date:
08-2020
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
Publicly committing to a ceasefire is a positive development, but many details still need to be resolved with active U.S. support, especially security arrangements in central Libya and the speedy resumption of oil exports. On August 21, the political leaders of the two main factions in Libya’s civil war—Prime Minister Fayez al-Sarraj of the Government of National Accord (GNA) and Speaker Aguila Saleh of the eastern-based House of Representatives—issued separate statements declaring a ceasefire and a freeze in military positions around Sirte and al-Jufrah. The move followed extensive diplomatic efforts by Germany, the United States, and the UN. Many of the deal’s terms will require further negotiation, but so far they entail establishing a demilitarized zone in central Libya and lifting the oil blockade that has cost the country $8 billion to date. Saleh also called for reformatting the Presidential Council and moving it from Tripoli to Sirte, while Sarraj called for holding national elections next March. The announcements grew out of the stalemate that set in after GNA-aligned forces pushed to the outskirts of Sirte in June. Since then, Egypt and Turkey have escalated their threats of direct military action, spurring intensified Western diplomacy to stave off a regional war. Of particular significance is Saleh replacing eastern military commander Khalifa Haftar in the negotiations. The latter’s sponsors in the United Arab Emirates and Egypt lost confidence in him after his fourteen-month offensive against Tripoli collapsed this May. In response to the new ceasefire, Haftar’s spokesman in the so-called Libyan National Army (LNA) dismissed Sarraj’s statement, vowed to remain in Sirte, and completely ignored Saleh’s parallel statement, indicating deep divisions in east Libya and raising questions about who has authority over the LNA’s fighting forces. Saleh has not been a reliable diplomatic interlocutor in the past and remains under U.S. sanctions for obstructing the 2015 Libyan Political Agreement. Thus, while Haftar is politically marginalized for now, he or other eastern commanders could still undermine the ceasefire.
Topic:
Foreign Policy, Diplomacy, Oil, Conflict, Proxy War, and Ceasefire
Political Geography:
Libya and North Africa

6. Understanding the Saudi Aramco IPO

Author:
Simon Henderson
Publication Date:
11-2019
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
economically transform the kingdom. On November 3, Saudi Arabia formally announced plans for the partial selloff of its state-owned oil company, to begin sometime next month. The successor of the Arabian American Oil Company, originally established by U.S. firms, Saudi Aramco is easily described in superlatives. It is the largest oil producer in the world, with the lowest production costs, and has a reputation for being extremely well run, all of which have helped it become the most profitable company on the planet. Yet being situated in the Middle East, having key installations vulnerable to Iranian attack, and selling oil to countries increasingly concerned about climate change are hardly factors conducive to favorable long-term prospects. The kingdom simultaneously claims to be diversifying away from its dependence on oil, adding to the uncertainty about its approach.
Topic:
Foreign Policy, Oil, and Business
Political Geography:
Middle East, Saudi Arabia, and United States of America

7. Iran’s New Budget Is Tight, But Not Tight Enough

Author:
Patrick Clawson
Publication Date:
12-2019
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
Rouhani has taken a remarkably austere fiscal approach ahead of the looming parliamentary election, but the country’s economic situation is still not sustainable over the long run. On December 8, following established procedures, President Hassan Rouhani visited parliament to present his budget for the Iranian year 2020/21, which begins in March. Notwithstanding the government’s rosy rhetoric, his spending proposals show the tough times the Islamic Republic is facing.
Topic:
Foreign Policy, Oil, Sanctions, Budget, Elections, and Economy
Political Geography:
Iran and Middle East