In his first two months in office, U.S. President Donald Trump’s relationship with Saudi Arabia became increasingly complicated. Trump made sure that his first phone call with a foreign leader after being sworn into office was with Saudi Crown Prince Mohammed bin Salman (MBS), gave a speech at the Saudi-sponsored Future of Investment Initiative Priority Summit in Miami, and announced that he will visit Saudi to conclude a trillion-dollar deal.
Yet his policies toward Iran, Gaza, and oil suggest a new chapter of diverging interests and priorities between the two countries. Trump’s renewal of the U.S. “maximum pressure” campaign against Iran could jeopardize the Saudi-Iranian rapprochement and lead to a resumption of Iranian attacks against Saudi oil facilities. The possible plan to coercively displace Palestinians out of Gaza makes concluding a U.S.-Saudi defense treaty as part of a normalization deal with Israel unlikely. Finally, Trump’s decisions to encourage an increase in American oil production and impose tariffs on China could drive oil prices below what Saudi Arabia needs for its ambitious megaprojects and transformational plan.
Reviving Maximum Pressure
Trump’s renewal of the maximum pressure campaign could lead to rising tensions in the Gulf after a brief period of relative stability. The Saudis remember the fallout from Trump’s first campaign: On May 12, 2019, Iran attacked four ships off the Emirati Fujairah port; two of them were Saudi oil tankers. The escalating attacks culminated on Sept. 14, just nine days before Saudi National Day, when 18 drones and several cruise missiles were launched against the Abqaiq oil-processing facility – the largest in the world – and the Khurais oil field and processing plant. These attacks briefly disrupted more than half of Saudi oil production and 5% of global oil output.
Instead of retaliating against Iran, Trump chose symbolic gestures in defense of Saudi Arabia. “The easiest thing I can do,” Trump told the press six days after the Abqiq attack, would be to say, “‘Go ahead, fellas. Go do it.’ And that would be a very bad day for Iran.” He then defended not striking Iran because the “thing that does show strength would be showing a little bit of restraint.” On Sept. 28, the Pentagon announced it would send Saudi Arabia 200 troops, a Patriot missile battery, and four ground-based radar systems. Two weeks later, the Pentagon said it would send 3,000 troops, in addition to “two fighter squadrons, an air expeditionary wing, two Patriot missile batteries, and a Terminal High Altitude Area Defense, or THAAD, system to Saudi Arabia.” However, when the two countries disagreed over oil production in May 2020, the U.S. called back 300 troops from Saudi Arabia and pulled two batteries that were guarding oil facilities there.
The potential for Iran to repeat its retaliation against Trump’s campaign could lead Saudi Arabia to abandon its “zero-conflict” regional policy that was adopted after Trump’s inaction against the Abqiq attacks. The period between 2015 and 2019 witnessed the most extreme form of Saudi regional interventionism. This coincided with the rise of MBS, who managed to centralize power effectively. In March 2015, the Saudis led an Arab military coalition in Yemen in response to a coup staged by the pro-Iranian Islamist movement Ansar Allah, also known as the Houthis. In December 2015, it announced the establishment of the Islamic Military Counter Terrorism Coalition.
A month later, Saudi Arabia cut all diplomatic relations with Iran after a mob attacked its embassy in Tehran in protest against its execution of a prominent Saudi Shiite opposition figure. In June 2017 – joined by the United Arab Emirates, Egypt, and Bahrain – the Saudi government announced the severing of all diplomatic ties with Qatar, citing as reasons Qatar’s relations with ISIS, al Qaeda, the Muslim Brotherhood, and Iran. In 2018, particularly after the killing of Saudi journalist Jamal Khashoggi in the Saudi consulate in Istanbul, a government-backed movement to boycott Türkiye was launched.
However, after the Abqiq attacks, the Saudi government adopted a more neutralist and conciliatory regional policy. On Jan. 5, 2021, during a Gulf Cooperation Council summit in Al-Ula city in Northwestern Saudi Arabia, Saudi Arabia and Qatar announced the end of their three-year dispute and the restoration of normal relations. Then the Saudi-led coalition in Yemen announced a unilateral cease-fire. In June 2022, the Saudi crown prince visited Türkiye and the unofficial economic embargo was lifted.
The same approach was used with Iran. In an interview in April 2021, MBS adopted a new stance toward the Islamic Republic, saying that “Iran is a neighboring country and all what we strive for is to have a good relationship with them.” This sentiment was reflected in several rounds of negotiations and was repeated in a March 2022 interview with The Atlantic, in which MBS said that the Iranians “are neighbors. Neighbors forever. We cannot get rid of them, and they can’t get rid of us. So it’s better for both of us to work it out and to look for ways in which we can coexist.” A year later, in March 2023, from Beijing, the two countries announced the resumption of their relationship.
The fact that this zero-conflict approach ended all attacks against Saudi Arabia from Iran and its allies explains why it has survived the test of multiple conflicts in the past few years. Instead of taking sides in the Russian-Ukraine war, Saudi Arabia decided to adopt a neutral, mediatory role. This same approach was adopted toward Sudan when a civil war erupted there in April 2023. When Israel launched its war on Gaza after Hamas’ surprise attack on Oct. 7, 2023, the Saudis led a diplomatic initiative for a cease-fire, expressed concerns against Israeli attacks in Yemen, and even condemned the Israeli attacks in Iran.
Expanding the Abraham Accords
There are two reasons to anticipate that the Trump administration and the Saudi government will diverge on Trump’s plan to include Saudi Arabia in the Abraham Accords. First, from the Saudi perspective, this plan is mutually exclusive in relation to Trump’s other possible plan to displace Palestinians out of Gaza, permanently resettle them elsewhere, and take ownership over their territory. It also contradicts Netanyahu’s vow to resume the war on Gaza. The normalization of Saudi relations with Israel is predicated on at least a credibly irreversible path toward a Palestinian state. A forced displacement of Palestinians out of Gaza would be the opposite of this requirement. It might be true that the Saudi government could have accepted something less than this requirement before October 2023. However, the war in Gaza, with its large toll in civilian deaths and destruction, increased the domestic costs of any normalization attempt without a credible commitment toward a Palestinian state.
Before the war, and after the signing of the Israeli-United Arab Emirates’ first Abraham Accords in October 2020, Saudi Arabia adopted incremental steps toward a normalization deal. It started this in September 2020 by opening its airspace to Israeli flights to the UAE. In July 2022, Saudi airspace was opened to all Israeli flights. A year later, in July 2023, an Israeli esports team sang the Israeli national anthem in Riyadh. These steps increased rapidly starting in September 2023, when Saudi Arabia joined the India-Middle East-Europe corridor with the United States, Israel, and India, among other countries, and hosted an Israeli minister in Riyadh for the first time. In an interview with Fox News on Sept. 20, MBS declared that normal relations with Israel were getting closer every day.
Alongside these steps, a continuous domestic media campaign was launched to influence Saudi citizens to accept the normalization. This new discourse emphasized a Saudi-first sentiment, downplayed transnational ties with the Palestinian cause, highlighted Hamas and other militant groups’ ties to Iran, and portrayed the Palestinian elite as ungrateful and betraying their own people. For example, the former Saudi ambassador to the United States, Bander bin Sultan, released a three-episode TV program in which he blamed Palestinian elites for not achieving statehood. This campaign operated under the assumption that since 56% of Saudis are below the age of 30, and 76% are below 40, this implies that the majority of Saudis are more malleable, less anti-Israel, and more susceptible to a revised framing of the Arab-Israeli conflict. It is difficult to assess how successful this campaign was, but a poll conducted in August 2023 showed that only 13% of Saudis support allowing Israeli sports teams to participate in events in Saudi Arabia and 30% support cooperating with Israeli companies in areas like cybersecurity.
However, as a result of the war in Gaza, young Saudi generations developed strong anti-Israeli attitudes. A poll conducted in December 2023 showed that 96% of Saudis thought that Arab countries should immediately cut all ties with Israel. The Atlantic reported that MBS told U.S. Secretary of State Antony Blinken that many Saudis “never really knew much about the Palestinian issue. And so they’re being introduced to it for the first time through this conflict. It’s a huge problem. Do I care personally about the Palestinian issue? I don’t, but my people do, so I need to make sure this is meaningful.”
This context explains the strong Saudi reactions to Trump’s claim that Saudi Arabia does not demand a Palestinian state in exchange for normalization and to Netanyahu’s suggestion to establish a Palestinian state in Saudi Arabia. The first undermines Saudi efforts to justify normalization as something that will bring Palestinians a state; the second undermines Saudi-first nationalism.
The second reason why Trump might fail to conclude a Saudi-Israeli normalization deal is his doubtful ability to meet Saudi Arabia’s other demands from the United States. These demands include a formal defense treaty similar to the one the United States signed with Japan, U.S. help with the Saudi nuclear program, and other economic cooperation agreements. Trump’s chaotic foreign policy agenda, coupled with his mismanagement of U.S. relations with key allies in North America and Europe, could convey a perception of unreliability. Moreover, Trump’s polarizing policies raise questions about his ability to secure the support of the 14 Democratic senators who would be required for the Senate to ratify the formal defense treaty, assuming unanimous Republican backing. Finally, if the maximum pressure campaign were to lead to rising tensions, it would raise the cost of offering a defense treaty to a country at risk of being attacked.
Increased Oil Production
Trump’s plan to decrease oil prices will have a negative impact on Saudi Arabia’s ability to fund major infrastructure and transformative projects. In addition to its Vision 2030 megaprojects, Saudi Arabia will host large events, such as Expo in 2030 and the World Cup in 2034. Trump’s plan includes increasing oil production through incentivizing American oil companies, and pressuring OPEC+ countries, including Saudi Arabia, to increase production.
Trump’s other economic sanctions, especially toward China, could lead to a decrease in the global demand for oil. Though it has been a decade since Saudi Arabia announced its economic plan to diversify its economy away from oil, its economy still largely depends on oil. In 2023, 63% of the state’s revenues come from oil. Moreover, China is the top buyer of Saudi oil. According to the International Monetary Fund, Saudi Arabia needs oil prices to be $96.2 a barrel to be able to balance its budget. While the overall Saudi financial situation remains strong, bolstered by its $435 billion in foreign currency reserves and lower borrowing rates, a decrease in oil prices would lead to more debt and significant budget deficits. Saudi Arabia forecasts a $27 billion deficit in 2025, and its debt-to-GDP ratio increased from 5.7% in 2015 to 29.7% in 2024. These trends, if they continue, could have negative repercussions in the medium term.
In summary, the Saudi Arabia that Trump currently deals with is significantly different from the Saudi Arabia he knew in his first administration. Its regional policy is less confrontational, its public opinions are increasingly anti-Israeli, and it is more than ever in need of oil revenues to finance its projects. Unless Trump adapts to these new realities, the interests of these two old allies will continue to diverge.
Policy Recommendations
Rather than pressuring Saudi Arabia to abandon its neutralist policy, U.S. interests in the region might be better served by supporting and strengthening this trend. In addition to the Trump administration’s current support for Saudi Arabia’s role in the Russia-Ukraine war, this involves encouraging Saudi diplomatic initiatives to bring a more durable stability to Yemen, Gaza, Lebanon, Syria, Libya, and Sudan. The two allies could use the current developments in Syria as opportunity to weaken Iran’s influence by coordinating efforts with Türkiye, Jordan and Qatar.
Iran today is much weaker than it was two years ago. Its influence in Gaza, Lebanon, and Syria has significantly decreased. Instead of a maximum pressure campaign that did not prove successful during Trump’s first administration, the U.S. could work with Saudi Arabia and other allies in the region to achieve a satisfactory deal with Iran and/or further weaken its regional influence by creating incentives and opportunities for current Iraqi leaders to abandon Iran.
Dr. Sultan al-Amer is a Resident Senior Fellow at the New Lines Institute’s Middle East Center and a member of the editorial committee of Alpheratz magazine. He is also a Postdoctoral Fellow at the Center of Middle Eastern Studies at Harvard University. Al-Amer’s research focuses on nationalism and nation-building, governance and technology, and regional politics in the broader Middle East, with a special focus on the Arab Gulf countries. Al-Amer is the co-founder and a member of the executive committee of the Arab Political Science Network. He is also a Bucerius Fellow at Zeit-Stiftung Ebling und Gerd Bucerius. He has written for New Lines Magazine, the Arab Reform Initiative, Carnegie Endowment for International Peace, the Middle East Research and Information Project, the Arab Gulf States Institute in Washington, The Gulf Center for Development Policies, and Cambridge Middle East and North Africa Forum. He was a weekly syndicated op-ed writer for the Arab international newspapers Al-Hayat, and Al-Arabi Al-Jadid, and the Saudi newspapers Okaz and Al-Bilad.
The views expressed in this article are those of the author and not an official policy or position of the New Lines Institute.