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HomeGeopolitical CompassArabian PeninsulaThe Case for a New U.S.-Saudi Strategic Compact

The Case for a New U.S.-Saudi Strategic Compact

Authors: Steven A. Cook and Martin Indyk

Affiliation: The Council on Foreign Relations (CFR)

Organization/Publisher: The Council on Foreign Relations (CFR)

Date/Place: June 2022/ USA

Type of Literature: Special Report 

Number of Pages: 50 



Keywords: US, Saudi-Arabia, Middle East, Strategic Compact, Energy Market


The historical context of Saudi-American relations returns to the end of World War II, with security and energy playing a pivotal role in linking these two countries’ interests with each other. By the de facto agreement, Saudi Arabia would exchange oil for US security guarantees. The two’s mutual distrust of communism during the Cold War period further bound the two countries together. Simultaneously, however, political systems, widely diverging values and differing views on Israel have created a tense partnership at times. In this context, the article proposes to negotiate a new strategic compact as a step for reconciliation between the two countries and also presents a set of arguments and justifications that support taking such an important step.


The first section addresses the most important milestones in the history of Saudi-American relations and highlights the challenges they have faced so far:

– Beginning in the late 1970s, there were three important events that contributed significantly to a pivotal reshaping of their relationship. Most notable was the Iranian Revolution, which overthrew the Shah and replaced him with an Islamic government. This led the United States to reconsider Saudi Arabia’s importance in ensuring stability in the Persian Gulf.

-Then came the 1980s, which saw intense cooperation, as the US-Saudi efforts succeeded in exhausting Soviet forces in Afghanistan and had shared interests in containing Iran’s territorial ambitions. Despite the decline in the relationship between the two countries in the mid-1980s, Saudi Arabia was forced to resort to American protection once more after Saddam Hussein invaded  Kuwait in 1990 and deployed forces along the Saudi border.

– In the 1990s, the confidence and relationship of the two countries was eroded by Clinton’s policy of “dual containment” towards Iran and Iraq, which required the presence of United States military forces within the Kingdom. This resulted in Saudi Arabia being targeted by Iranian and jihadist forces. Relations were further exacerbated after the outbreak of the second Palestinian intifada in 2000, with Saudi Arabia threatening to reassess their bilateral relationship. The crisis was subsequently averted when Bush promised to support the establishment of a Palestinian State. Nevertheless, the relationship did not return to its former status.

 – After the September 11 attacks, relations between the two countries escalated. However, their cooperation continued, especially after Saudi Arabia’s support for US intervention in Afghanistan. The two significantly strengthened their cooperation in combating terrorism. However, Iraq’s invasion in 2003 further exacerbated relations. Riyadh viewed Saddam as a necessary counterbalance to Tehran, as well as its concern about regime change in Iraq leading to chaos, or allowing Iran to strengthen its influence through the country’s Shia majority. Saudi Arabia also questioned Washington’s intention to make Iran a key partner in the Gulf region again.

 – After the Obama administration’s decision to support the Arab revolutions and transition to democratic regimes, Riyadh’s fears that the same would happen to it increased, especially after Baghdad, Beirut and Damascus came under Iran’s influence in 2012. Saudi Arabia considered US policy to be responsible for Iran’s expansion in the region, especially after it tried to negotiate with Iran on the nuclear deal and shift its foreign policy focus from the Middle East to Asia.

 -The situation worsened when the United States Congress announced the JASTA Act aimed at undermining the “sovereign immunity” of foreign governments before American courts. The main objective of this legislation was to prosecute Saudi Arabia for complicity with al-Qa’eda. In contrast, Riyadh decided to resist the nuclear deal with Iran known as “JCPOA” and declared its readiness to support the counter-revolution in the region, which included intervening in the Yemen war alongside the United Arab Emirates. In 2015, Washington withdrew arms transfers to Riyadh over increased civilian casualties in its ongoing war in Yemen.

– In Trump’s tenure, the United States turned into a less reliable security partner for the Saudis because of the many differences that existed between them, especially given the transition of American focus to Asia due to Chinese ascent. Biden furthered this trend after taking power. The United States then moved to reduce dependence on Saudi oil and turned to electric vehicle production, and major oil companies shifted to alternative and sustainable sources of energy as a result of the pressure on the U.S. government over the climate change crisis.

-The authors believe that Bin Salman’s rise has also had a significant impact on shaking the foundations of the relationship because he abandoned the cautious and consensual approach of his predecessors. For example, he sidelined all his domestic rivals, intervened militarily in Yemen and imposed a blockade on Qatar. 


The second section calls for the need to reassess the relationship between the United States and Saudi Arabia in view of the changes that have caused significant divergence and affected the strategic partnership between them. Initially, the authors believe that the process of reassessment of oil should begin first. The Russian-Ukrainian war has significantly raised energy prices. As one of the world’s largest oil producers and the only one with the potential to increase production rapidly, Saudi Arabia is able to influence oil prices and thus by extension the global economy and the U.S. This actually happened in 2020 when Riyadh entered into a pricing dispute with Moscow, leading oil prices to drop to zero and a negative impact on the world’s U.S. shale industry. This contributed significantly to Washington’s renewed interest in Riyadh.

At the same time, the United States is closely monitoring Bin Salman’s plans and welcomes his recent vision of reforms aimed at improving the Saudi economy and adopting a moderate Islamic model rather than the hardline Wahhabi model of Sunni Islam that has caused so much damage to Muslim communities around the world in the past. This is due to Riyadh’s leadership and strong influence in Arab and Islamic societies.

Taking into account Iran’s clear and serious threat to the stability of the Middle East region, especially as it approaches the elaboration of the basic requirements of a nuclear weapons program, increases Saudi Arabia’s regional importance.  The authors argue that the United States’ other Arab allies do not have the same political weight as Saudi Arabia in the regional balance of power. Therefore, Saudi Arabia’s strategic importance only increases given the vacuum left by the United States after shifting its focus to Asia and Europe.


Section Three warns of possible future deterioration in relations between the two countries if each party continues to adhere to its current position, with several possible scenarios based on the current options. For Saudi Arabia, the authors assume it will continue leaning towards Russia and China to strengthen its trade relations and maintain the oil quota agreement with Russia. They are also likely to increasingly rely on the Russian-Chinese arms and technology market if the United States does not act quickly and change this situation, especially in light of the international system’s current strong geopolitical competition. The United States will likely continue to pursue a hostile approach to Saudi Arabia and pressuring Bin Salman on human rights issues and the war in Yemen.                                                                                                                                                              

Assuming a scenario of the divergence between the two, the authors believe that despite its negative effects, both parties can benefit from it in different ways. For Washington, it could benefit if it improves relations between Saudi Arabia and Israel, which would contribute to the region’s stability. This opportunity will also give Washington the ability to pursue a more rational energy policy and look for alternatives to lower prices, boost its shale production, and encourage investment in production elsewhere. For Saudi Arabia, it would also benefit from their belief that Washington no longer serves their security interests. They will also be shunned by The fight against the violation of human rights and Bin Salman’s style of government would encourage such a scenario. 

If we follow a realistic reconciliation scenario, this step will emerge as the most rational solution, but it requires accepting both sides to compromise, something which may not be easy. Biden will have to abandon the values-based policy towards Mohammed bin Salman, lift the arms embargo on Saudi Arabia and allow him to continue the war in Yemen, which could spark a wave of outrage. This would earn Bin Salman’s favor. However, the authors expect that America’s reliability and security dilemma will remain. As the effects of the war in Ukraine recede, the basic logic of realistic reconciliation will inevitably weaken, making it more difficult to sustain.


The last part of this article calls on the two countries to recognize the overlap of their interests and renew their relationship by concluding a “new strategic agreement.” The essence of this agreement is to confront Iran’s nuclear and regional ambitions. On that basis, Washington and Riyadh would have to negotiate mutual steps so that each would make parallel commitments to each other.

The article stresses the need to solve the problem of lack of reliability, for which it suggests that Washington be willing to provide security assurances to Saudi Arabia by adhering to a NATO-like treaty that would recognize any attack on Saudi Arabia as an attack on the United States. These oral commitments can be strengthened by establishing formal consultation mechanisms, conducting joint military exercises, enhancing integrated defense capabilities, providing defense weapons and also employing other tools. If a return to the nuclear deal with Iran fails, Washington will be forced to provide Saudi Arabia with a nuclear shield. In return, Saudi Arabia must commit to not possessing nuclear power, including uranium enrichment.

The Biden administration hopes Bin Salman will take steps to increase confidence in him as a trusted partner, one of which is Saudi Arabia’s formal and open pledge to use its surplus oil production to stabilize oil prices and become an alternative to Russia in supplying Europe. The second step would be for Saudi Arabia to withdraw from Yemen in exchange for the Biden administration’s commitment to provide it with weapons and technology to counter any Houthi attacks. As a third step, it would normalize relations with Israel and strengthen their strategic partnership to compensate for Riyadh’s military deficiencies. For example, opening commercial offices, granting flight rights and organizing direct flights for Muslims residing in Israel and Palestinians in the West Bank and Gaza Strip. In order to avoid its hostile attitude towards Israel, Washington could encourage Israel to freeze settlement activity outside the wall and cede more West Bank land to Palestinian control. As a last step, Bin Salman must take responsibility for Khashoggi’s murder, restrict the country’s religious establishment and give women equal rights, and promote a reformist, inclusive and tolerant image of Islam internationally.


The authors conclude this article by emphasizing the need for the two countries to negotiate a new strategic charter for the twenty-first century, despite the difficulties posed by this step. Otherwise, the United States will find itself dragged back into the spiral of Middle East conflicts.

By: Ryma Meddah, MA in IR and International Law



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