The Russian-Ukraine war has jolted the European energy market. The more Europe moves away from Russian oil and gas imports, the more challenges the US will face in figuring out how to manage the rising energy crisis in Europe. Russia understands that the massive dependence of Europe on Russian oil could act as the trump card for it to coerce Europe into accepting Putin’s diktats. However, the US remains adamant on finding an alternative for Europe’s energy demands, and it can find one if it rejuvenates its limping relations with Saudi Arabia.

Although the US and Norway are firm in their commitment to continue filling the vacuum created by the drop in Russia's oil and gas production, the region is still dependent on Russia for a major portion of its energy demand. In August, Russia provided 1.7 million barrels per day to Europe. This highlights that as Europe moves towards a complete ban on Russian oil and gas, it will intensify the need for alternative energy supplies. For that, Middle Eastern states have the potential to fill the gap. However, based on the political influence of Saudi Arabia over other OPEC countries, the way forward stands in the response of Riyadh towards Washington.

Relations between the US and Saudi Arabia are at a low point since the murder of journalist Jamal Khashoggi. Be it the US step to withdraw its air defences from Saudi Arabia or Mohammad Bin Salman's (MBS) statement that “[he does] not care” what Biden thinks of him, all have further aggravated the situation for possible rapprochement. Biden tried to reach out to MBS by visiting Riyadh personally, but he could not materialise the trip. The reason for this is the offset relations, and that the mutually hurting stalemate is yet to be reached, particularly for Riyadh.

Saudi Arabia: swing producer of oil

Since the start of the war, Riyadh-based oil companies have observed colossal profits from an increase in oil prices. In the second quarter of 2022, Saudi Aramco disclosed record profits reaching $48.4 billion. The stage for such profits was set by the war in Ukraine and the surge in energy demand in the post-Covid scenario. This is one reason why Riyadh has maintained a neutral position towards the crisis, thus asking both sides to let dialogue and diplomacy take precedence. The second reason is Riyadh’s invasion of Yemen, which is somewhat based on similar grounds as the Russian invasion of Ukraine – security concerns and historic ties with the neighbour.

Nevertheless, the ongoing crisis is increasing the importance of Saudi Arabia in US-backed sanctions against Russia because of the X factor Saudi Arabia has to offer in the energy market. Riyadh has the monopoly as a swing producer of oil – a supplier that can increase oil production substantially – to up the ante against the Biden administration, which once aimed to declare Saudi Arabia a pariah state. This is one major reason why, if the US is unable to convince MBS to reset relations, then it could aggravate the tensions in the energy market regarding pricing. Thereby, increasing tensions in the West on how to bring down the mounting prices of oil because the US is already working at its full potential to supply energy to the EU. As a result, relations must be reset because the US cannot keep on releasing strategic oil stockpiles to the International Energy Agency (IEA) for long.

How can Saudi Arabia help?

         Oil prices have reached an unprecedented level. If Saudi Arabia increased oil production, it would lower oil prices, making it easier for the European Union to buy oil at a more affordable rate. Also supporting Europe’s efforts to decrease its dependence on Russian oil. But to date, Riyadh has rebuffed requests to increase oil production despite Biden’s call to King Salman. Riyadh remains committed to the agreement between OPEC+ members to steadily increase oil production only at the rate of 400,000 more barrels a day.

Nevertheless, Saudi Arabia remains the only state that can bring down the skyrocketing prices by producing oil at 13 million barrels a day. Therefore, it is more relevant than ever for the US to rethink whether realpolitik should overshadow US human rights concerns regarding the killing of Jamal Khashoggi or not. Raison d’etat-based foreign policy guides the former rather than the latter line of action so that a resetting of US-Saudi Arabia relations could be made possible. The improved relations amid the ongoing crisis will help augment US-backed sanctions against Russia by effectively countering Russia’s weaponisation of energy. Furthermore, if oil prices remain high, it may reduce the effectiveness of international sanctions against Russia. 

What’s next?

Despite Biden’s visit, the outright antagonistic posture of MBS is a daunting concern for the US. The Biden administration's strategy for reestablishing relations with Saudi Arabia will rely more than ever on Riyadh's economic-induced national interest. With Russian oil spilling into Asian markets, this will raise alarm bells for Saudi Aramco, which has remained concerned over the control of oil markets in Asia. For instance, Russia’s huge discounts for India led to an increase in Russia’s oil imports into India, subsequently decreasing India’s oil purchase from Saudi Arabia. Although the situation has reversed, it is only because Russia itself increased the prices as the demand for Russian oil increased in Asia. Therefore, similar scenarios coupled with a complete embargo of Russian oil by the West will surely lead to the emergence of a mutually hurting stalemate for both the US and Saudi Arabia, where they could negotiate, thus recalibrating their relations.

Conclusively, the possibility of a shift in Saudi Arabia’s stance on oil production seems meagre. But the US needs to improve its relations with Saudi Arabia because the winters are coming, Europe’s energy demand is increasing, and the US cannot support Europe’s energy demand for long. Therefore, it is the ripe moment for the policy pundits in Washington to readjust their relations with Saudi Arabia, which can support the US efforts to solve Europe’s energy demands.