The Peter Zeihan Podcast Series - US and Saudi Arabia Relations: Part 2 || Peter Zeihan

Episode Date: August 3, 2023

Yesterday we covered the key players in the US and Saudi relations. Today we'll look at the strategic implications of this relationship over the past 40 years and what it looks like moving forward. Full Newsletter: https://mailchi.mp/zeihan/us-and-saudi-arabia-relations-part-2

Okay, it's next time. We're talking about U.S. Saudi relations. U.S. national security advisor, Jake Sullivan, was in Saudi Arabia last week to see if they could hack out a new deal. Now, Saudi Arabia really matters. More so than many of America's like true allies for a couple of reasons. First of all, it sits on the holy sites of Islam, Mecca Medina, and as so has the ability to reach out to Muslims wherever they happen to be with a significant message that is often taken seriously. And second, it's the world's largest oil exporter, giving just a huge amount of cash to pay for things and to manipulate the markets. There are three big things that Saudi Arabia has been critical in dealing with in the last 40 years.

The first one is in the 1980s, a deal between then-King-Fodd and Ronald Reagan saw the Saudis open the taps in defiance of what was going on with OPEC and basically drove the Soviet Union out of business by by tanking oil prices. It triggered an economic war that the Russians who were addicted to commodities exports income and were using it to support their empire throughout the world simply couldn't compete with. So this massive expansion that we saw under Bresnev, clearly across the developing world, had the Soviet Union subsidizing some of the world's poorest countries, and that couldn't be sustained when oil prices tanked.

It was very effective. It also triggered the last period of strong economic growth that we have ever seen out of Europe and Japan. not to mention setting the ground worth for the economic activity that was required to generate the information boom here in the United States. Second, fresh off that success, Reagan again with the Saudis, orchestrated the war in Afghanistan, basically building the Mujahideen, providing them with weapons and equipment and funding to fight the Soviets, which was, again, wildly successful because it turned what was a bit of a strategic adventure into a bleeding wound that the Soviet Union never recovered from. And then when the Soviet system fell and the Americans moved on, the Saudis discovered that the tools that they used for Afghanistan were applicable in other places. And so the Chechen wars happened.

Now, they probably would have happened anyway. But the Saudis and the Emirates and some of the other Gulf Arabs stepped in to provide financing and equipment and intelligence and recruiting for the international forces that eventually decamped to Chechnya and helped the Chechens in their first and their second wars. Now, you play this forward in today's environment, things get very lively. The oil situation is obvious. The Russians are already crimped because of sanctions. And if the Saudis actually were to tank oil prices again, wouldn't have much of an effect on the American economy because we're self-sufficient now. But it would absolutely crush the Russians' bottom line.

Second, the Chechen scenario, it's entirely possible that there are other groups, while there are other groups within Russia that don't enjoy being under the Russian thumb. Right now the Chechens are fighting officially on the side of the Russians, but there are many factions within the Chechen system, and anything that was to break that up would force the Chechians to go home and fight for their own lands. There are also the Tatar, which exists not only in Russia proper, but also in Crimea. So you could easily have some underground wars that would greatly stress Russian operations, and set the stage for a renewed Ukrainian push.

Bottom line, Saudi Arabia, it's not that its natural position is under the American wing. It's not. It's its own power center. But to think that something like a hacked-up journalist and a policy at electric vehicles is going to get in the way of grand geopolitic in an environment when all the major players are already in motion, that's a little naive. Saudi Arabia is a free agent, and there are any number of things that the Americans and the Saudis can provide for one another if they can get past some of the ugly politics of the last few years. And if history shows us anything, they've done it before. All right, that's it. Take care.