Skeptical optimism in the Gulf

May 20, 2017, was a red-letter day for the relationship between Saudi Arabia and the United States. The newly elected US President, Donald Trump, arrived in the Saudi capital Riyadh for his first foreign trip. There he met with King Salman and his son Muhammad bin Salman, who was later appointed crown prince and has been expanding his power ever since.

In Saudi Arabia, Trump's visit was seen as the beginning of a new era. Relations had cooled significantly under Trump's predecessor Barack Obama, who had played a key role in negotiating the nuclear agreement with Iran, viewed as a breach of trust in Saudi Arabia and other Gulf monarchies. Trump's termination of the nuclear agreement in 2018 and his strategy of "maximum pressure" on Iran were more than welcome in the Gulf states.

Yet despite the initial euphoria, the Trump presidency was by no means free of tension for the Gulf states. Just a few weeks after Trump's visit to Riyadh, the so-called "Gulf Crisis" began, when Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt established a blockade against neighboring Qatar. In this "clash of egos", Trump was supposed to support Saudi Arabia and the UAE, but he was conspicuously restrained in his anti-Qatari rhetoric during the crisis. In the end, the Gulf monarchies settled their dispute in 2021.

Minilateral alliances

The Saudi leadership was even less impressed with Trump's lack of response to the missile attacks on the two Saudi oil refineries Abqaiq and Khurais in September 2019, which briefly paralyzed half of Saudi oil production. For the Saudi leadership, this attack, attributed to Iran, was a shock, as it displayed their own vulnerability to external threats.

In the Gulf, far-reaching strategic conclusions were drawn from these experiences:

• Firstly, there was a realisation that the US could not be relied upon in an emergency – regardless of who was in the White House.
• Secondly, the Gulf monarchies increasingly focused on their national economic development in order to diversify their oil-dependent rentier economies.
• Thirdly, there was a move away from confrontational regional policy towards a course of rapprochement, compromise and tactical conflict management. 

Since then, the Gulf monarchies have pursued a self-sufficient strategy of both/and instead of either/or. They do not feel they belong to either the Western or the non-Western bloc, but instead strive for so-called minilateral alliances which offer them the best profits. Saudi Arabia, for example, sees the resumption of diplomatic relations with Iran in March 2023 as a tool for managing conflicts in the region. At the same time, however, Riyadh is seeking security guarantees from the United States. The Gulf monarchies are seeking a middle way to make themselves irreplaceable. 

Pragmatism, not enmity

This has become increasingly apparent since the start of the disastrous Gaza war in October 2023. The Gulf monarchies have repeatedly called for regional de-escalation, fearing an open war between Israel and Iran, which would endanger their own stability and the success of their business model.

Even diplomatic relations between Riyadh and Tehran have not broken down under the enormous burden of regional escalation. High-level meetings between Gulf Arab and Iranian officials and  representatives of the security apparatus take place regularly, and there is even speculation about Iranian-Saudi military training in the Red Sea, something denied by Saudi Arabia's foreign minister. While this dialogue with Iran is by no means based on a relationship of trust, hostility towards the Islamic Republic is seen as a business-damaging fail which must be countered with pragmatism and tactical skill.

Furthermore, all actors in the Gulf region–the monarchies as well as Iran–vehemently reject the actions of the Israeli government in Gaza and Lebanon and criticise them as "genocide". At the same time, an anti-Western narrative has become established in many societies of the Arab Gulf monarchies, branding the US and Europe (the so-called ‘West’) as hypocrites and schemers with double standards, because their one-sided support for Israel has increased the suffering of the Palestinians and lost them their moral credibility.

Since Trump’s last visit to Saudi Arabia, the strategic calculations of the Gulf monarchies and their expectations of the USA have changed dramatically. While emphasising that they have already worked well with Trump, there is also a cautious realism in Riyadh, Abu Dhabi and Doha. They are preparing for a Trump presidency that can benefit them but also harm them. This is evident in three areas:

1. The relationship with Israel:

Trump's first nominations for his new team show that his one-sided, pro-Israel stance will not change much in comparison to his first term in office. This is a dilemma for the Gulf monarchies: on the one hand, they need the US as a security guarantor in the region. On the other hand, the prospect of a Palestinian state cannot be ignored in light of the atrocities in Gaza.

Saudi Arabia therefore presents itself as a supporter of the Palestinian cause and has, among other measures, set up the Global Alliance to Implement the Two-State Solution. As in his first term in office, Trump's goal will be to seek normalisation between Israel and Saudi Arabia. However, since the beginning of the Gaza war, these talks have been on hold and Saudi officials  have repeatedly stressed that there will be no resumption of negotiations as long as there is no concrete plan for a two-state solution in sight. The tone towards Israel has become significantly harsher in recent months.

At the same time, the timing of a potential normalisation with Israel is an important trump card for the Saudi leadership, which it can play in its dealings with Trump. There is a vague hope that the prospect of normalisation will persuade Trump to take a harder line with Netanyahu in order to end the war and facilitate concessions for the Palestinians.

From a Saudi perspective, the price of normalization with Israel has definitely increased: Whereas before October 7, 2023, what was on the table were security guarantees, arms deliveries and a US commitment to support a civilian Saudi nuclear programme, now the question of a two-state solution has become a political priority for the Saudi leadership, one that cannot be rendered obsolete by a typical Trump-style deal. Saudi Arabia has too much of its own reputation and credibility at stake for that.

The leadership in Riyadh nevertheless sees itself in a strategically favorable position. With the potential normalisation with Israel, it has something to offer Trump that would benefit his own interests and flatter his ego. Not only could he profile himself as a peacemaker, but he could also proclaim a vision of an economically prosperous region with a strong Israel.

2. The relationship with Iran:

It is highly likely that Trump will resume and even intensify his policy of "maximum pressure" against Iran. Trump does not want regime change or open war between Israel and the Islamic Republic any more than the Gulf states do. Instead, he has announced that he will negotiate a ‘better deal’ with Iran in order to force Tehran to make far-reaching concessions.

Such a policy could be a balancing act with erratic results. At present, it seems likely that the Gulf monarchies will continue to maintain equidistance and will not form an anti-Iranian alliance. Their own calculations are at the forefront here, as they fear that Iran could attack targets in the Gulf monarchies directly or through its own proxies such as the Houthis – as has already been seen in the past. Instead of confrontation, the Gulf monarchies could pursue a policy of containment and limited cooperation with Iran, while at the same time the US could pursue containment and pressure – ‘controlled toughness’. 

3. The economy:

Saudi Arabia and the UAE hope to benefit from Trump's transactional, market-driven economic approach in terms of investments, arms deliveries and business deals. Both crown princes – Muhammad bin Salman in Saudi Arabia and Muhammad bin Zayid in the UAE – have personal relationships with Trump and his inner circle which also benefit their own businesses. This is shown, for example, in the role of  Trump's son-in-law, Jared Kushner, who acted as a go-between for economic deals during Trump's first term in office and has continued in this role in recent years. Elon Musk could take on a similar role.

Nevertheless, challenges remain: Trump could increase oil production in the US, which would likely lower the price of oil. In this context, he could exert pressure on OPEC+ and thus weaken the interests of Saudi Arabia.

Trump’s uncompromising stance on China could also be problematic for the Gulf monarchies. Compared to his first term of office, China's economic importance in the Gulf has increased. The People's Republic has long since replaced the USA as the most important trading partner and is now also acting as a diplomatic networker, as shown by its mediation role in the rapprochement between Iran and Saudi Arabia. 

The Gulf monarchies are therefore awaiting Trump's return to the White House with sceptical optimism. On the one hand, they hope he will bring a new transactional dynamic to resolving regional conflicts, and expect close economic and security cooperation. On the other hand, they fear his unpredictability, which could lead to an escalation – a horror scenario for the ambitious diversification plans of the rulers in the Gulf. 

Translated from German by Louise East.