Call Me Back - with Dan Senor - China Surprise: Saudi-Iranian Detente

Episode Date: March 13, 2023

China just announced that it had brokered a deal between Saudi Arabia and Iran to restore diplomatic relations, for the first time since they were officially severed in 2016. But this news begs more questions than it answers. To help us understand what it means for Washington, Jerusalem, Beijing, Tehran, and Riyadh, Rich Goldberg joins the podcast. Rich is a senior advisor at the Foundation for Defense of Democracies. From 2019-2020, he served as a Director for Countering Iranian Weapons of Mass Destruction for the White House National Security Council. He previously served as a national security staffer in the US Senate and US House. He was a founding staff director of the House U.S.-China Working Group and was among the first Americans ever to visit China’s human space launch center. A leader in efforts to expand U.S. missile defense cooperation with Israel, Rich played a key role in U.S. funding for the Iron Dome. Rich is an officer in the U.S. Navy Reserve with military experience on the Joint Staff and in Afghanistan.

One of the things the Biden administration would say is, listen, on paper, we really haven't relieved any of the maximum pressure sanctions. Maximum pressure that we inherited from Trump is technically still in place. How could the Iranians be able to survive two years of maximum pressure? And the answer is China. huge leverage over the Iranians by ramping up to incredible levels the amount of illicit oil imports they were taking from the Iranians in a way where it kept them afloat. In recent days, China announced that it had brokered a deal between Saudi Arabia and Iran to restore diplomatic relations for the first time since they were officially severed in 2016. The formal restoration is scheduled to occur in two months.

Now, this is a really big deal, a really big surprise. I want to provide a little bit of history before we bring in our guest to explain the history between Iran and Saudi Arabia and why this news was such a shock to so many capitals around the world. Keep in mind, Saudi Arabia and Iran were in a proxy war with one another throughout the Middle East. The two countries have been rivals since 1979 following the Islamic revolution in Iran. The post-1979 Iranian regime has repeatedly called for the toppling of the Saudi government and supported Shiite rebels inside Saudi Arabia. Shiites make up approximately 20% of Saudi Arabia's population. So if Iran can back some subset of them against the monarchy,

that could pose a real threat. Ties worsened dramatically after the Arab Spring in 2011, when Iran backed Shiite citizens trying to overthrow the Saudi-backed Bahraini monarchy. Keep in mind, Bahrain is right on Saudi Arabia's border. Iran also supported a sectarian civil war in Yemen to the south of Saudi Arabia and sent troops to Syria to support the government of Bashar Assad during Syria's civil war. So all around Saudi Arabia, the Saudi leadership has felt the pressure of Iran's military activities and threats. In 2017, Saudi Crown Prince Mohammed bin Salman claimed that Iranian Supreme Leader Ali Khamenei was, quote, worse than Hitler. And then in 2019 and 2020, Iran-backed Houthi rebels in Yemen, which we'll talk about in today's conversation, launched a wave of attacks on Saudi civilian and energy infrastructure. Tensions continued to escalate, culminating in suspension

of relations, as I said earlier, in January of 2016, until now, and thanks to China. What does this all mean? What does it mean for Beijing? What does it mean for Jerusalem? What does it mean for Riyadh? What does it mean for Tehran? I mean, just go country by country by country of all those involved, either directly or indirectly. This raises more questions than it answers. But to help us ask the questions and answer them, first-time guest Rich Goldberg joins the conversation.

Rich is a senior advisor at the Foundation for Defense for Democracies. And from 2019 through 2020, he served as a director for countering Iranian weapons of mass destruction for the White House National Security Council, and he previously served in the U.S. Senate for former U.S. Senator Mark Kirk, which is when I first got to know him, and he also worked with Mark Kirk in the House. Rich was a founding staff director of the House U.S.-China Working Group and was among the first Americans ever to visit China's Human Space Launch Center, and he was a leader in efforts to expand U.S. missile defense cooperation with Israel. In fact, Rich played a key role in U.S. funding for the Iron Dome. Rich is also an officer in

the U.S. Navy Reserve with military experience on the joint staff and in Afghanistan. Surprised a taunt between Saudi Arabia and Iran. Thanks to China? This is Call Me Back. And I'm pleased to welcome to the podcast my friend Rich Goldberg from the Foundation for the Defense of Democracies, probably the most important think tank in Washington, D.C. on Iran when it comes to U.S. policy in Iran. He's also a former staffer on the National Security Council of the Trump administration, where he worked primarily on U.S. policy on Iran, and those were some of the most tumultuous and important years in U.S.-Iranian relations or tensions, and Rich was a big part of that. He worked on Capitol Hill for a number of years, which is when I first got to know him

as an advisor, top advisor on national security in all matters to then U.S. Senator Mark Kirk. And Rich was really one of the key architects of the congressional, bipartisan congressional strategy on sanctions towards Iran. So I can't think of anyone better than Rich to help us understand this news that really lit up on Friday and through the weekend in the Middle East. So, Rich, thanks for being here. Yeah, great to be here, Dan. Okay, I don't think people always appreciate the depth and breadth of the U.S.-Saudi relationship. So it goes back to 1945, to the USS Quincy, when President Roosevelt met with Saudi King Saud on the American cruise of the USS Quincy in the Suez Canal.

By the way, that was on Valentine's Day, fun historical fact, Valentine's 1945. And it was, you know, it was really like the dawn of what is now the longest U.S. relationship with an Arab state. It's a relationship that survived 15 presidents, seven kings, and it survived an oil embargo, an Arab oil embargo. It survived two Gulf wars, two wars against Iraq. It obviously survived the horrendous attacks of September 11th, in which Saudi Arabia got drawn into in terms of the debate and the implications for U.S.-Saudi relations. So the U.S.-Saudi relationship has been through a lot through presidents of both administrations, of presidents of both parties, and yet it has seemed that the Biden administration

has probably been the lowest point, going back through those 15 presidents, of relations between Saudi and the U.S. And I just want to quote here, because in July of last year, President Biden visited Saudi Arabia after giving Saudi Arabia a very cold shoulder during the presidential campaign and during really the first year of his administration. He visited Saudi Arabia, and he said, and I quote here, the United States will not walk away and leave a vacuum, meaning in the Middle East, to be filled by China, Russia, or Iran. All right, this is President Biden in July of 2022.

The United States would not walk away and leave a vacuum to be filled by China, Russia, or Iran. Now, less than a year later, China has brokered the most consequential diplomatic agreement in recent years in the Middle East and in restoring ties between Riyadh and Tehran. And it seems to have upended a key pillar of Washington's strategy to contain Iran. And so there's a lot going on, and not to mention when he says not leave a vacuum to be filled by Russia-Iran. The other big development is Russia and Iran are now working together in the war in Ukraine, and Iran is helping arm Russia with drones and whatever else in that war, but we'll leave that issue aside for a moment. So here a year ago, here last year, President Biden goes to Riyadh and

says, we won't let their vacuum being, we won't allow for a vacuum to be filled by bad actors or other geopolitical rivals. What does this represent? What is this development? Like, what is the significance? Is the significance that there was a vacuum and China was filling it? Well, I think that the big sort of surprise moment that has caught most people off guard is that so long as we have known Mohammed bin Salman, the crown prince of Saudi Arabia, as the crown prince, right?

Sort of the world's attachment, relationship, perspective, perception of what they call MBS has been through the lens of hostility towards Iran and building coalitions with the United States, with Israel, with the rest of the Gulf partners who are willing to be aligned to have some sort of containment strategy of some kind of pressure strategy on Tehran to squeeze the Iranian regime of resources and try to make sure that their proxies have less resources, whether certainly for Saudi's interests, their Yemeni proxy, the Houthis, which they have dumped millions of dollars upon millions of dollars in weapon systems, missiles, trainers

from Iran. So just for our listeners, so the Houthis are a rebel force in Yemen that is mired in this civil war in Yemen, and it's predominantly Shiite, right? And Iran has been backing the Houthis, and the Saudis have been frustrated because the Houthis, not only have they been engaged in the civil war in Yemen, but it is in close proximity to Saudi Arabia, and the Houthis have been implicated in some attacks against Saudi infrastructure. Saudi and UAE, and we're talking not just some attacks,

we're talking missile attacks, we're talking ballistic missiles going into their countries, trying to target their oil sectors, their airports. We're talking drone complex attacks along with missiles. that war began, that we would, as an ally of Saudi Arabia, provide security, provide some sort of weapons systems, intelligence support, something to the Saudis as they engaged in this war along with the UAE for some time against the Houthis, while seeing the Iranian military support for the Houthis continue to pour in. That's part of this story, by the way. So keep that in the back of our minds as we think about what has just happened here and why it has happened. But you talked about 1945 and the meeting on the USS Quincy. One of the things we should keep in the back of our minds,

the context of the US-Saudi relationship over all those decades up and down was this idea that our relationship was premised on oil for security That Saudi Arabia one of the world's largest oil producers with the largest oil reserves Would be there for the United States for the West to? Export more oil when our national security interests were on the line and in exchange We would provide security guarantees to ensure the kingdom did not fall, that they were always protected with the long arm of the United States military. Keep that in the back of our minds as well. So we have MBS becoming the crown prince amidst this civil war in Yemen, the Saudi commitment to trying to drive out the Houthis from Yemen, defeat what they see as a rising Iranian-backed terrorist organization. We saw MBS supportive of the Trump administration's

maximum pressure campaign and believing that that was helpful to Saudi Arabia's security to try to contain, squeeze, roll back, maybe even undermine and destabilize, if not bring down the Iranian government. And the key sort of claim you would hear, the thesis, if you will, of the current Saudi government through all its ministers when they talk about Iran for the last several years anybody who's had a meeting with anybody in the Saudi system has likely heard the story of 1979 and the revolution happening in Iran but then something else happening in Saudi Arabia at the same time and how Iran sat at the center of Saudi Arabia's misguided security and foreign policy strategy of trying to appease

the Wahhabis, the religious extremists within the country, because Iran had fomented an uprising, a terrorist attack, a takeover of the Grand Mosque in 1979. And this was a major flashpoint, it's a major moment of inflection for the Saudi kingdom. And as MBS and the current Saudi royals tell it, is all of Saudi history from 1979 flows from that moment. And 9-11 and other issues like that, that arose from Saudi Arabia's decision to try to embrace Wahhabis, to try to embrace and fund religious ideologies and extremism, was a pendulum swing that was a bad decision prompted by their fears of Iran stoking

religious extremism inside Saudi Arabia and trying to bring down the Saudi kingdom. And that all the ills of the region stem from Iran, all the problems of the world, the Middle East, stem from Iran. And if we can just come together and put pressure and contain the Islamic Republic, then we might be able to stop all the conflicts we see that we're being drawn into, whether it's the United States or Saudi Arabia or others, in Syria. The takeover of the Lebanese government by Hezbollah, the destabilization of the West Bank in Gaza, Hamas, Islamic Jihad funded by Iran, and of course, Yemen on their border.

And so when you wake up and see that that government, that regime that has been expressing that view so powerfully for the last six, seven years, now all of a sudden out of nowhere says, hey, we're normalizing relations with Iran again. By the way, just listening to you describe it is interesting because it is how Arabists at the State Department used to describe the Israeli-Palestinian conflict. The Israeli-Palestinian conflict is the source of all tension in the Middle East. If we just solve the Israeli-Palestinian conflict. The Israeli-Palestinian conflict is the source of all tension in the Middle East. If we just solve the Israeli-Palestinian conflict, we solve the Arab-Israeli conflict.

If we solve the Arab-Israeli conflict, it's peace in the Middle East. And what you're saying is actually from Riyadh's perspective, isolating Iran was the key to peace and stability in the Middle East. Correct. That is what they have articulated throughout the government for several years now. And so the decision— So you're saying it's such a shock, then, that all of a sudden Riyadh says, no, we're good. We're going to normalize.

Right. On its face. On its surface. We're going to go deeper. We're going to go deeper. But if that's the context that you know, and that's the headline you wake up to, this is a shocking move. And I understand now the ripple effects of headlines and news reporting of, whoa, this is an earthquake. And Saudi foreign policy has shifted here. Who is this bad for? Is this bad for America? Is this bad for Israel? Everybody's losing here. Is this good for Iran? The questions are obvious to ask.

Okay. So we're going to ask some of those questions. But I want to also have you, because you follow this honestly more closely than anyone I know, can you explain a little bit where we are or just, you know, do a little tutorial on where we are with the Iranian nuclear program, because I think that in and of itself is a big story and alarming, and makes this news even more disconcerting, because if Iran is actually getting closer and closer to having a nuclear weapons capability, and Saudi Arabia was considered a key player in the, you know, counter-Iran strategy at a time when it's on the cusp of going nuclear, and suddenly it seems like Saudi has flipped, as the press would make you, you know, have us believe. It's not entirely that clear that they've, quote-unquote,

flipped to the other side, but maybe they've gone somewhat neutral. It's important to just think about all that in the context of where Iran is in its nuclear cycle, so to speak. So can you talk a little bit about that? I will, and I'm going to combine it not just with the nuclear threat, but other threats as well that emanate from Iran and the trajectory of those and how they tie together for Saudi perception. So we obviously had the period of the Iran nuclear deal. People remember President Obama made a deal with the Iranians and the other P5 nations of the Security Council that said, we will lift all U.S. sanctions, provide over a number of years hundreds of billions of dollars worth of sanctions relief. And in exchange, the Iranians would essentially

push pause on most of their program on the enrichment side Delay and setback to certain extent any plutonium path to the bomb But they would be allowed to keep facilities in place keep doing research and development on advanced Interfuges they just have to keep enrichment at a very low level and a relatively low cap of a stockpile so that they're Quote-unquote breakout timeline that is the time it would take Iran To further to develop their stockpile of enriched uranium to the weapons-grade uranium you need to build a bomb to be able to make one bomb's worth, would be at least one year. That was what the JCPOA was.

We did a whole other podcast on whether it was a good deal or a bad deal. But during the period of the JCPOA, Iran was keeping its enrichment at three, let's just say a little bit under 4% low enriched uranium purity level, which is very, very low. But it was actively producing and learning how to produce. It was still working on research and development on one day being able to deploy advanced centrifuges. And the stockpile of low enriched uranium that they could keep was 300 kilograms. Enter Donald Trump. Donald Trump says, listen, this was a flawed agreement. We've lifted all of our sanctions.

Iran is racing forward on its missile program. It's sponsoring terrorism. Syria is getting worse. Look at Yemen. We have no tools to push back other than military power. I want non-military options. The only way to unlock my non-military options is to get out of the deal and bring back U.S. sanctions. And oh, by the way, we're going to have to deal with that crisis

anyways, because the deal had the sunset provisions. It's going to expire soon. We can have this fight with Iran today, or we can have a confrontation with Iran in 10, 15 years when they have long-range ballistic missiles capable of delivering nuclear warheads, and they're entrenched throughout the region. Let's have this debate now. Iran, in response, in 2019, when the Trump administration attempts to drive its oil exports to zero under the so-called maximum pressure campaign, starts to break the caps of the Iran nuclear deal. At first, they start enriching more and more low-enriched uranium. Their stockpile starts to grow. They announced November 2019, they're going to start enriching very low levels of uranium again at their underground facility, their second enrichment

plant at Fordow. And then 2020, a few things start happening. First, Donald Trump decides to assassinate, to kill, to order the killing of Qasem Soleimani, the head of Iran's Revolutionary Guard Corps Quds Force. A principal player in the, you know, principal architect of or instrument of so much of the chaos in the Middle East that Iran was behind, whether it was Iraq, Syria, Yemen, I mean, pick your country, Israel. But the Iranians saw that as, whoa, Donald Trump, we thought he was a Twitter tiger, right, all these tough tweets against Kim Jong-un and us, and he never responds militarily. And now he's just sort of gone to DEFCON 1 on a military response all of a sudden based on a terror threat and he's threatening he

might bomb our nuclear program and all that unpredictable guy crazy Trump we better slow down on this escalation so the nuclear escalation sort of just stays where it has been coming into 2020 for the next year meanwhile the Trump administration starts moving forward towards the end of its time on trying to put more pressure on the Houthis in Yemen, right before leaving office designates the Houthis as a foreign terrorist organization, an official terror organization designated by the State Department, which comes with sanctions and all kinds of other law enforcement applications.

And you start seeing a real drop for the moment in missile attacks from Yemen against Saudi Arabia, against the UAE. Iran at that point down to very little amount of money. Enter Joe Biden, who has taken over as president by January 2021. And the Iranians have seen him campaigning on two things, one, making Saudi Arabia pariah, and number two, going back to the Iran nuclear deal. And we entered this last two year period of offering the Iranians incentives to try to come back into compliance with the nuclear deal offering over and over that we won't, you know, put more sanctions on, we're trying to relieve some sanctions here and there over time and the iranians instead of saying great we got

rid of trump we're happy to go back to that deal that obama made with us you know basically draw out for two years the biden administration and under cover of talks start escalating their nuclear program again this time and rich you don't't—I mean, so there are some— there are different views on why the Iranian return to the JCPOA or what would have been the JCPOA 2.0, different views on why it didn't work out. But one view is that the Supreme Leader, Khamenei, didn't want to go back in. Correct.

He didn't want the constraints. He didn't want the constraints. He didn't want the incentives. He wanted to further develop and further spin centrifuges and do everything one has to do to have a nuclear bomb eventually. And they had no interest in the JCPOA. And so far, the evidence would suggest that that is correct, because we don't have a return. In fact, instead of returning, every nice meeting they had, you know, indirectly with an American, they wouldn't meet with us directly, we had to do it through the Europeans,

they would escalate their nuclear programs. They went to 20%, which is the threshold for high enriched uranium. Then they did it again at the underground facility then they would jump to 60 percent enriched uranium and they looked around and it's you know we've always sort of been afraid of an iranian breakout that's the term of like racing to a nuclear bomb they i think are looking around saying we're walking out guys like nobody's stopping us right so 60 the term breakout meaning i mean there's a term that's used in in proliferation circles is that is the ideas that if they have all i mean i'm going to oversimplify this, but they have all the bells and whistles in place so that the moment they want to kind of flip to having the speed they have at their disposal to move towards it. And what you're saying is they were able to do everything they needed to do without anyone

really pressuring them, that like breakout was not such a big deal. They can just kind of casually stroll into a nuclear weapons capability. Exactly. They would curtail international inspectors' access to facilities. And then just recently, we saw a detection of 84% enriched uranium at the underground Fordow facility after we had learned from the IAEA, the International Atomic Energy Agency, the UN's nuclear watchdog, that they had just reconfigured their centrifuges at that facility in a way that many experts suspected was to allow them the technical capacity to enrich weapons-grade uranium.

84% is just under that threshold of 90% to be weapons-grade. Yeah, and as the IAEA has said in the past, no one gets to the 80s or anything remotely close to the 80 percentage level of enrichment who has the intention of a civilian nuclear program. There's no need for this. Right, right. In no world does any country

do what Iran is doing if they just want a civilian nuclear program. It was clear even to the IAEA who has had an uneven record on this issue, but even they said, the head of the IAEA, who's been, has had an uneven record on this issue, but even they said, the head of the IAEA said, come on. Like, this is clearly a country that has ambitions to have a weapons capability. Now, one other thing happened, too, over the last two years. One of the first actions that the Biden administration took was to reverse the Trump administration's designation of the Houthis as a terrorist

organization. And immediately you saw an uptick in the trend of missile attacks and UAV attacks against Saudi and UAE. And it got worse through the year as there were these overtures to the Iranians by the Biden administration. Our missile defense systems that had been deployed forward to help Saudi Arabia after they had been attacked at their oil facility in 2019, to try to say, hey, we're trying to do something about our security guarantees. Here's more missile defense capabilities were withdrawn by the Biden administration, all military support, the US provided to the Saudis for their war against the Houthis was withdrawn and restricted. And so we were pulling back our security guarantees from the Saudis and the

Emirates. The violence against them from the Iranian-funded Houthis was increasing, and the nuclear threat was accelerating unabated. And here we find ourselves, you know, one of the things the Biden administration would say is, listen, on paper, we really haven't relieved any of the maximum pressure sanctions. Maximum pressure that we inherited from Trump is technically still in place. How could the Iranians be able to survive two years of maximum pressure? And the answer is China. China became this great savior of theirs by ramping up to incredible levels the amount of illicit oil imports they were taking from the Iranians. And in different ways, in barter arrangements, in ways that we may not be able to fully track in the open source, but I imagine the White House is aware of being able to repay the Iraniansians take money from here move it to there in a way

where it kept them afloat and the and unlike the trump administration that in 2019 when we saw this happening we started cracking down on the chinese hard threatening to climb the ladder with sanctions against state-owned enterprises there was a big standoff if you guys remember in 2019 2020 with costco the big shipping arm of china shipping costs actually skyrocketed when we took an action in the trump administration and and the chinese actually pulled back on on their economic support to the iranians under threat of u.s financial sanctions none of that happened over the last two years so the chinese are building huge, huge leverage over the Iranians, helping keep them afloat through U.S. sanctions pressure while the U.S. is pulling back security guarantees from the Saudis. Meanwhile, the president and his party screaming bloody murder against MBS himself over the Khashoggi killings, which are abhorrent, but are not exactly the way you come into office saying,

hey, I want to continue the U.S.-Saudi relationship. Keep in mind that MBS is 37 years old at the time that Biden, I think, comes into power. So if you assume that MBS will be alive and vibrant well into his 80s, well into Joe Biden's age. He's going to be, in one form or another, running Saudi Arabia probably for the next 50 years. And remember, the Saudis have a close relationship with the Chinese as well. So now you have a dynamic where the Iranians have built incredible dependency on the Chinese, and the Chinese maintain a very close relationship with the Saudis

as one of their best customers for Saudi Aramco, for Saudi oil. And you go and you meet with Saudi officials, even as much of the Western world over the last couple of years has grown in its understanding and perception of a rising Chinese threat to Western democracy, that is not a refrain you hear in Saudi Arabia. That is a close ally of the Saudis. Not the kind of alliance they had hoped they had with Washington, but still a close trading partner of the Saudis. And so when you now think about the announcement in context, we have the lack of a security guarantee for the Saudis for two years from Washington with no sign that one is coming in a credible way.

If not active distancing and snubbing, other than when the U.S. wants Saudi's help with OPEC. Exactly. We have the Iranian threat continuing to grow against the Saudis with no hope that there's a cavalry coming from the United States. And not just that, it was U.S. policy for the last two years to urge the Saudis to normalize relations with Iran as part of resuscitating the Iran nuclear deal. It all fits in alignment that the thesis of the Iran nuclear deal, the strategic underpinnings of it is a restoration of some sort of balance of power in the Gulf, that the Sunni Arabs and the Shia Persians should be co-equal

in some way. And somehow the JCPOA, the shorthand for the Iran nuclear deal, creates this equality in security. And that's why the Saudis hated the deal. But if there's not going to be anybody to protect them from an Iranian threat, and if the Iranian threat is increasing on their border, they have to look elsewhere. They have to look for a hedge. And as it turns out, there's one other great power in the world that has leverage over Iran, and a pretty good working relationship with the Saudis, and it is China. So before we go through each of these countries' perspectives, more granularly, do you think the U.S. administration knew much about this? I mean, the reports are they've said, oh yeah, we knew there were talks over the last

couple of years. I think the talks commenced in like April of 21 between Saudi and Iran. We knew about them, but I don't know. Just reading between the lines, it did seem like they were surprised by this announcement. There is no question in my mind they have known about the track of normalization for the last two years because they pushed for it. That I know for that I know for a fact our US Special Envoy Rob Malley would travel to the region quite often You would have discussions with the Saudis about these meetings We would use good offices with the Iraqis in Baghdad to try to facilitate a lot of these talks We talked to the Omani's and we talked to the Qataris about helping in this. The one actor that, to my knowledge, was never really part of the mix,

maybe there's some secret channel that was going on with the US, I highly doubt it, was China. And China's entrance to this, to be a broker, really starts last year when we saw Xi come to Saudi Arabia. President Xi of China came to this big GCC summit, gave a big show of support to MBS, a major show of respect.

And this was before, I think, Biden's trip, right? It was before. It was after. It was in the fall. So then didn't MBS go to Beijing before Biden's trip? Yeah, correct. So we'd already sort of gotten the signal from MBS, hey, I can look elsewhere. Right.

And I'm prepared to hedge against the United States if that's what I have to do. And Biden's trip went terribly, as I think plenty of the press coverage and analysis following has shown. It didn't accomplish any of its objectives, certainly with the oil production or with repairing the U.S.-Saudi relationship. And so we start seeing MBS move forward, continuing on a track with hedging against the United States with Beijing. And Xi does something really smart strategically during his visit to Riyadh. He agrees to a joint press release with the GCC, with the Gulf Cooperation Countries, led by Saudi Arabia and the UAE, in which he just signs off on GCC talking points for the region

to the Iranians' chagrin, in fact, outrage. One of the points in this document was actually siding with the UAE in a land dispute, in an island dispute between the UAE and Iran. And the Iranians went nuts. Huge protests in Beijing. They had to send a special person to Beijing to try to have a kumbaya session. And she ended up having to return to Iran and say, no, no, no, don't worry about all that. I'm still with you, too.

By the way, you don't get to tell us what to do. We tell you what to do. And that was a real telling moment, I think, for MBS, that she had some sort of power there to push the Iranians in line, if you wanted to, to some extent, and still maintain support for MBS. OK, so I want to go through each of the countries. You've talked a lot about what Saudi gets out of this. One issue, the day before this announcement, the Wall Street Journal published a story

about Saudi Arabia's, quote, openness to normalization with Israel in exchange for formal American guarantees of security assistance, as well as American support for Saudi's civilian nuclear program. Now, Saudi Arabia has sought formal security guarantees since the Trump administration when you were there, and I think without tremendous success. But just on the nuclear issue, Saudi Arabia has already planned to build 16 commercial nuclear reactors by 2030. In 2020, I guess there were satellite images that revealed the construction of Saudi Arabia's first research reactor, two major uranium mines, as well as a yellow cake extraction facility. By the way, a lot of this was allegedly built um by with the help of the chinese and then there was the saudi energy minister who promised to develop a full

nuclear fuel cycle i can go on and on and on i've been sort of keeping track of a lot of this um so saudi has been on the moves there's been making a lot of moves on the path to its own nuclear program, and it's clear that it's a priority, and what are the implications now in terms of if Washington has even less leverage for Saudi Arabia, and China has been helping Saudi Arabia with its nuclear program, should we be worried? I am worried that the Saudis have made a strategic decision to pursue a Chinese-esque head strategy in the world where we will be nice to whoever, if it suits our interests, we'll cozy up to whoever, we'll play all sides, which does not fit well in a U.S. security framework. We cannot be providing a country our maximum support and access to our technology, various intelligence, military support, nuclear technology, et cetera, if we believe that will be turned around and shared with our great threat of the 21st century.

It's just not possible. And by the way, we're not just making that clear to Saudi Arabia. We've made that clear to much closer allies, be they in Europe, be they in Israel, or elsewhere. This is what we perceive in Washington to be the great threat of the century is going to be the U.S.-China relationship and where it goes. And so we're very much guarded in how our allies are cozying up to Beijing and with good reason. We have seen over several years now concerns about a relationship with the Saudis and the Chinese on the ballistic missile front, on the civilian nuclear front. And so all of that is context for one more reason why in the framework of great power competition alone, we should have been very intensely working on

the pillars of the U.S.-Saudi relationship that MBS would buy into in a wholesome way committing to Washington and saying I'm I'm you know we're in a marriage a very senior Saudi official said to me when I asked and I was concerned about where the direction is with the Chinese and he said to me you know it with Washington were married we've been married over 75 years now. And we have ups and downs in a marriage. People come in and out. But we stay married.

We're not married to the Chinese. We're not married to the Russians. Those are different kinds of relationships. We understand that they will not have our backs at certain times if we need them. And ultimately, in crisis, with great leaders in the United States, you have had our backs at certain times if we needed them. And ultimately, in crisis with great leaders in the United States, you have had our backs. Okay, put that context aside for the moment. The question is here, in the context of Mohammed bin Salman coming to the United States and saying, listen, I want to make peace with Israel, Israel. We have the Abraham Accords now,

which we know could never have taken place without MBS's quiet assent. The fact that UAE, Bahrain, particularly normalizing with Israel back in 2020, needed to be blessed by the Saudi royal court. We've seen a lot of movement towards normalization normalization should happen by the way on its merits alone without anything from the United States merely because it's in Saudis interest long term both security wise you know we may have just seen an announcement of an Iranian Saudi normalization deal whatever that means they're gonna have embassies that whatever that means, they're going to have

embassies. That's nice. You think they're going to pull back really like all the malign activity, the terrorism sponsorship, the missiles, the nuclear program? No, the Saudis know that. So they still need Israel, the only country in the region that has its back truly with shared interests long term security wise. Also on the Islamic extremism side as well which which mbs still cares about greatly and then on the economic side you just talked about you know the vision 2030 kpis on the nuclear front well those run the gamut on the economic side on high tech and r&d and all kinds of ai they need the israelis to help them they need the the Israeli tech sector. They want the VC folks involved. They want collaboration, joint R&D, and growth into an integrated Middle Eastern market. That's going to be able to put MBS's KPIs in real context. They're pretty extraordinary if you've ever actually gone through his slide deck that McKenzie gave him. But the idea that he can get there on his own just with PIF money flowing is not going to get him there.

He needs the technology. He needs the brains. He needs folks from Israel working with folks in Saudi and helping build an ecosystem that does not exist in Saudi Arabia, but he wants to see exist. Okay. So, so instead of just saying, Hey, let's just keep on our path. He also sees that he wants the United States to be a part of this. He wants to know that if that if he takes a big political risk, right, I mean, it's a Saudi Arabia, it's not UAE, it's not Bahrain. It's the crown jewel right Saudi Arabia. He is still You know in charge of Mecca right home to Mecca in Saudi Arabia

the Muslim world ultimately looks to Riyadh and the Muslim World League and so with the Iranians capable of undermining him and Islamic radicals capable of undermining him and Who knows still Wahhabis in the kingdom. He wants to know what will be the set of security guarantees and economic guarantees that I'm getting from the United States that will be permanent. Because you made a permanent commitment to Egypt when they normalized with Israel in 1979. You made a permanent commitment to Jordan when they normalized. You've made security guarantees and commitments.

We're seeing F-35, et cetera, coming to UAE as part of Abraham Accords. Saudi Arabia wants to know what are we going to get for the next century. So you just talked about this Wall Street Journal exclusive that starts exposing these demands that he's put on the table, supposedly. And a former colleague of mine, somebody at Jensen now, John Hanna, former NASA security advisor to Dick Cheney,

wrote about this on a recent trip. He came back. He heard these exact same demands that are now reported as fact in the Wall Street Journal. He wrote his own op-ed a couple months ago about this, and he said this is what MBS wants to do normalization. And you're correct. They are out of reach

from a practical reality, both on a politics sense and on a policy sense. Mohammed Salman is asking for if he's going to have U.S.-built nuclear power plants, which he says he would like. He wants to have us build him

nuclear power plants in which he is also enriching uranium for those power plants on Saudi soil. But can't he get this from china he can he can so so isn't he effectively saying i mean you're saying he's he's going to washington saying all right washington this is what you did for egypt this is what you've done for jordan this is what you've done for the abraham accord countries you know what what do you got for us it It's like, it's a bizarre. He can't get the security guarantee from China.

Ah, okay, that's important. That's important. So in a world in which he's playing China and in a world in which he's playing China and Washington or Beijing and Washington off each other, he knows the real win is Washington for that reason. He can't get the security guarantee. If he doesn't, he's made a grave strategic error because ultimately Washington is never going to align with Iran. Yes, the JCPOA can make you very confused about that issue.

And while I am probably one of the greatest critics of the Iran nuclear deal and the Obama administration and Rob Malley and others, the U.S. is not going to be an ally of iran we're not we're just it's just not going to happen we're not going to try missiles and and fighter jets and and who knows what we're not going to help them evade our sanctions so they can fund terrorism and missiles against us but china absolutely already does so we have this context of of this um of this offer being put on the table and okay so that so they're a little bit outlandish for the moment you would imagine it's an opening bid right yeah i'm gonna tell you what i want you know now now come back to

me right okay what it's a negotiation he's throwing out hey, I'll normalize with Israel, but let's see what I can get out of this. But they also come with sort of very clear policy sort of messages underlying them. What's the argument that we say when we go back and say, no, I'm sorry, we can't give you the fuel cycle. You can't enrich uranium on your own soil. Look, the UAE agreed to that quote unquote gold standard over a decade ago when we did a nuclear agreement with the UAE. And look, the UAE agreed to that quote-unquote gold standard over a decade ago when we did a nuclear agreement with the UAE. And look, we're providing nuclear power to them. It's great. The UAE loves it. And they don't enrich on their own soil. Well, Saudi Arabia comes back and says, yeah, but guess what you did a few years later? You did an Iran nuclear deal when you allowed my mortal enemy and your mortal enemy to enrich uranium on its own soil. So wait, if the Iranians

can enrich, but I can't enrich, what are you talking about? So, you know, and part of my response, of course, is because I oppose Iranian enrichment, I oppose the JCPOA, is you're right, you're right. You know what? Let's align our policy. We're back against all enrichment on Iranian soil. We're going to do all we're back against all enrichment on iranian soil we're going to do all we can to stop iranian enrichment it's a threat to peace and security and by the way we will absolutely provide you with nuclear power without enrichment too only it's gonna be a lot better than whatever the iranians have because that's russian so that so that's one piece of it security arrangements arrangements. He's saying, I want a security commitment from the United States because I've been attacked by the Iranians. I might be attacked again. The Houthis are still attacking us. You need to do something for me. I want, any sort of a treaty commitment to Saudi Arabia would be difficult to obtain at the moment.

But I think he also is sort of saying, I want to see a process where you, the leader of the Democratic Party, have to start leading and articulating the benefits of the strategic relationship as president of the United States and bring your party along to something and start changing the fact that I face a Washington that might be permanently against me because of the politicization of the relationship over the past few years. Both Democrats who hate Saudi Arabia just because Donald Trump liked them and now Democrats who are sort of more energized based on the leadership and distance they've put under the Biden administration. So these seemed like they were conversation starters with sort of a, and I'm going to just show you, I'm capable of hedging. I could go to Beijing if you don't want to do this with me. I think you should. But now they come out with this announcement a day later,

and it looks very much like he's made a choice. Like he's already broken with the United States. He said to the Chinese, hey, if you can play the middle man here, if you can be the cop in the Middle East and keep the Iranians in check, we'll do this deal with you. You're going to be the guarantor now instead of the United States for keeping the balance and keeping the Iranians out of our stuff. We'll choose you for now. Does that mean that his offer and his request on normalization is off the table?

Does that mean that if we were to come back and say, hey, we'll give you a treaty commitment even, we'll give you a nuclear power, he would say, great, but I'm still with Beijing at the same time? Is that even possible to negotiate right now? I think that's a real question mark. And it's the one particular downside to the Israelis. There's a very transactional relationship in the moment. You're basically saying it's a very transactional relationship in the moment you're basically saying it's a very transactional relationship in the moment and the moment could

pass and he and nbs will be back in business with riyadh okay i want to talk to you about israel so it's well understood how do i say this it's well understood that in israel's maximum pressure campaign against iran uh for the military option to remain viable, some kind of Saudi cooperation was always assumed to be part of the picture, and that was a big part of the basis for the warming of relations between Saudi and Israel over the last number of years, well before the Abraham Accords. I mean, there's the economic relationship which you've talked about, which I think will continue to flourish

between Saudi Arabia and Israel, but there is the strategic relationship in terms of countering Iran. Does Israeli military action against Iran now seem much less feasible without Saudi Arabia being considered a reliable partner? I argue it does not diminish the potential for an Israeli military strike

against Iran or continued increased military action or hybrid warfare, whatever you want to call it, gray zone warfare that we've already been seeing. Because in the end, if the Saudis were concerned that being caught providing airspace to the Israelis or a landing zone or a refueling zone to the Israelis, at some point that would be smoked out by the Iranians. Somebody would figure it out while a conflict was going on. It would get leaked. It would get exposed after the fact. And the Iranians would retaliate. So the Saudis already baked that into their calculus. If they were afraid of Iranian retaliation and that the U.S. would not defend them, and the Israelis clearly would have their

hands full already with Hezbollah in the north and Hamas and Islamic Jihad and ballistic missiles flying back from Iran, they're not exactly diverting the IAF at the moment to defend Saudi Arabia. The Saudis already would have denied the Israelis airspace and all these other things, right? With or without an embassy in Tehran. To me, this has not changed the equation at all. So what is the Israeli strategy here? We've already seen the escalation starting with the recent drone attack that was reported inside of Iran, launched from inside of Iran. We have seen past rumors. I just want to go back a little bit. So you're saying that until relations normalized further

between Riyadh and Jerusalem, you wouldn't really have what Israel needs from Saudi in terms of indirect support for a military operation against Iran. So almost the situation is not worse than it already is. It still has a long way to improve for Israel to be able to count on Saudi support for military action. Is that what you're saying? Correct. The Saudis can support the Israelis in other ways that don't expose them to Iranian retaliation, right? And I think that was already in their risk calculation. Because with a Trump White House, with an Israeli coalition without diplomatic relations with Iran, Saudi Arabia was attacked in 2019 in a very, very major way at Abaqaik, at the Aramco pipeline facility. And there was no military

response from the United States. There was no defense from the United States. And that was a major turning point, I think, as well for MBS to realize that we're exposed here. And so the idea that I'm, what I'm hearing is that, well, now that there's a normalization and restoration of diplomatic ties potentially in a couple months and there will just be embassies and ambassadors exchanged and you don't know what else if anything goes beyond that remember the UAE has diplomatic relations already right with the support point the UAE they said their ambassador back last fall right the UAE nobody seemed to care at the time right right right although

the you could argue the UAE doesn't play as an important role in all of this than Saudi. So the stakes are higher with Saudi. True, true, true. But the Abraham Accords occurred despite that normalization. The Abraham Accords continued despite UAE sending back its ambassador last year. So the strategic part is fine. There's northern Iraq, right? Reportedly, Israeli operations have been launched from the Kurdish areas of northern Iraq.

Reportedly, the Azeri border is porous. Reportedly, there's a lot of interesting stuff that happened in the Baluch areas on the Pakistan border. So there is a lot of different ways for the Israelis to operate as we have already seen them operate. Having to use Saudi airspace would certainly be nice. Yeah, but it's a much more, yes, there are other options. But without access to Saudi airspace, there's the scenarios you're talking about.

It's more complex. It would involve flying, you know, dozens of fighter jets over Syria and Turkey and refueling them in Azerbaijan. I mean, it starts to get really complicated. Here's the test that I would say to people to look for. Does anything get rolled back right now? Does anything change in Iran's favor right now and in Israel's disfavor right now? That's the first sort of thing we should all look for. MBS has started to allow Israeli commercial aircraft to fly over Saudi Arabia. Does that

still go on? It seems like it's still going to go on. Saudi and Israel work together in central command. That doesn't change. Yeah, doesn't seem to change. The Saudis have been funding one of the leading Iran opposition news sites, news organizations, television stations, Iran International. It's been out of London. You've probably seen the news. They're under threat from the Iranians right now. They might be moving to the United States because of that threat. Is that website going down? Is that TV station no longer broadcasting? Is it going to be pro-Iran all of a sudden? I think there's a lot of little tea leaves that we're going to be able to look at.

What happens to the Houthis in Yemen over the next few months? They just put out a statement on a Lebanese terrorist station just in the last few hours saying, we do not take orders from Tehran. Nothing is changing for us. Now, that could just be their propaganda. We don't know what Tehran has agreed to do or not agreed to do. We're going to need to watch whether or not the Houthis are still receiving support from the Iranians. I'm sure the Saudis will too.

So this is one announcement. It's supposed to be the precursor of foreign ministers meeting and then something happening in a couple of months after Ramadan. I don't yet see, we have to watch it, it's early, that this is somehow bad for Israel. It's going to stop the path to normalization. It impedes the Israelis' ability to strike Iran as it's nearing weapons-grade uranium. This is a setback for Washington in great power competition. I mean, one could argue that it's not about, right, it's not about Iran, it's not about Saudi detente with Iran at the expense of warming of relations with Israel, it's about Saudi-China relations at the expense of Washington's

influence in the Middle East. Absolutely, that's number one. And number two, we haven't talked about it yet, is Iran's internal problems, and whether that is driving what is going on. We have seen over the last few weeks the Iranian rial collapsing. I mean, really under pressure. We've always said it's under pressure. It's always been at a historic low every few months. The bottom has sort of been dropping out. It hit 600,000 riyal to the dollar just a couple weekends ago. Started rising a little bit after the Iranians invited the IAEA chief, Rafael Grossi, to meet and he was sort of, oh, you know, we may have a deal on cooperation with the IAEA again. That turned out to be just press reports and nice statements. But it helped the recovery of the market a little bit. The real, the economy in Iran, sort of is, its underpinnings are whether or not there's going

to be any sort of arrangements in the world that allow access to capital to flow. If there's a hope that the Iran nuclear deal comes back, the real rises. If sanctions are being put on Iran because of support to Russia, oppression of women, etc., the real starts falling. Well, they were under so much pressure for the last few months because of the constant increase in European and American pressure because of their support to Russia, primarily, but also the pressure from what we saw, the uprising and the protest movement and the sanctions imposed on Iran after that, that there was not enough money in the system to keep the rial up. They kept pumping more and more money out of their reserves, just dumping cash into the marketplace to try to keep the banking system going. We started seeing reports in the last few weeks that they were really out of cash in certain areas of the country. They couldn't pay for basic things happening to keep government services running.

So it is possible that the Iranians are in such an internal financial situation right now because of the increased pressure following their support to Russia, following repression that they have basically said, we got to do a few things that don't allow us to force us to give us that much, but get some sort of economic benefit in return. Could normalization with Saudi be part of that? The real is surging. I will note on this news surging and back up to about430,000 to the dollar from the $600,000 to the dollar low point. Before we wrap, what do you think Washington's next move should be,

and what do you think it will be? Well, I think we cannot cede the Middle East, we cannot cede Saudi Arabia and the Gulf to China. I think that if we allow this relationship to grow unimpeded and say, eh, MBS has made his choice, made his bed, we're out of here. Let him have the Chinese. That is not going to work out well for the United States. It's not going to work out well for Israel. It's not good in the context of great power competition with China. And so the first step needs to be to try and assess if fighting for the U.S.-Saudi relationship is viable and potentially fruitful.

And that is going to need to come in the context of very high-level conversations in private between American and Saudi leaders where we really try to have a frank dialogue on the requests that we just talked about that MBS has laid out as the conditions for normalizing with Israel, and to say if we were to get serious on these requests and come up with a formula that really spoke to U.S. generational commitment to Saudi Arabia over this century,

are you willing to tell us that the following areas of real sensitivity for the United States vis-a-vis China are off the table for Saudi Arabia. We understand you are an oil exporter. And frankly, by the way, at many times in our history, we have encouraged the Saudis to sell more oil to the Chinese when it benefits us, right? We pushed them into the Chinese arms on oil during the Trump administration because it helped us cut Iran's oil exports down to zero.

We worked with them very close. We did that 10 years ago, more than 10 years ago, under the Obama administration as well when the Senate imposed sanctions on the central bank of Iran. So we're not going after that issue. That's happening. The economic trade relationship between Saudi Arabia and China is not our issue. Our issue are specific key security-minded areas, military, nuclear, sensitive technologies, where we need your commitment so that we can come to that consensus, I think what MBS has put forward is a basis for a negotiation that should be able to have a real foundation for the next 75 years of US-Saudi relations, which also, by the way, springboard into Saudi-Israeli normalization and a US-brokered

but allied-led strategic framework and security framework for the Middle East for the rest of the century. I think that's helpful for us vis-a-vis China, helpful vis-a-vis Iran, and helps support our allies in the Middle East. That's what I would do next. All right, Rich, we will leave it there. That was a real tour de force. So thank you for that, especially on such short notice. And I look forward to being proven completely wrong in the next month as this situation completely unfolds. This is the nature of foreign policy.

No, no, no, no. Unlike doing financial and economic modeling there are no there are no spreadsheets that that can help you model out uh exactly what's going to happen but yeah your analysis is as incisive uh as ever so i appreciate taking the time and we will bring you back on we will call you back we will bring you back on and and play back some of your earlier oh i've wanted to say this i've wanted to say this since you started the podcast and play back some of your earlier podcasts to see if they held up. I've wanted to say this since you started the podcast. First time caller,

long time listener. Does nobody say that? Am I the only guy? We've had others like Mike Murphy and others try some clever slogans for us, but that is really good. We will make sure

to put a punctuation mark after that at the end and you may have trademarked that. All right, Rich, thanks for doing this. Thanks, Dan. That's our show for today. To keep up with Rich Goldberg's work, you can find him on Twitter at Rich underscore

Goldberg and at the Foundation for Defense and at the Foundation for Defense of Democracy's website, FDD.org. And you can listen to his podcast, which drops weekly. It's called the Limited Liability Podcast. Just search Apple Podcasts or wherever you get your podcasts for either the Limited Liability Podcast. Just search Apple Podcasts, wherever you get your podcasts, for either the Limited Liability Podcast or for Rich Goldberg. Call Me Back is produced by Alain Benatar. Until next time, I'm your host, Dan Senor.