What’s Happening

Saudi Arabia, the US, and Israel are heading back to negotiations as they seek to outline potential terms for a deal that would see Saudi Arabia and Israel officially establish relations. However, analysts believe the road ahead to be significantly difficult, particularly because of Saudi Arabia’s thus far-established terms being things Israel is not prone to engage in.

If Israeli-Saudi relations are established, it would not only be a landmark peace deal but also open up Israel to a mountain of Saudi investment.

The Saudi Terms

As mentioned, one of the largest obstacles ahead is what Saudi Arabia is asking of the US and Israel. While the terms are not detailed and are rather broad, the US said they hope to hammer out specifications in the next 9-12 months. First of the Saudi demands is massive Israeli concessions towards Palestine, which would assist in the eventual creation of a Palestinian state. Secondly, Saudi Arabia is seeking security guarantees from the US (though the level of which has yet to be established). Thirdly, the Saudis are seeking US help in establishing a civilian nuclear program.

The Palestinian Cause

Since Israel’s independence, many Arab states have championed the Palestinian cause in their approach toward Israel. While a number of the nations that warred with Israel previously have since established some level of relations, the Palestinian issue remains prominent for Saudi Arabia. Historically, peace deals between Israel and Palestine have a number of times been drawn up and then scrapped.

As it presently stands, Netanyahu’s government is vehemently opposed to the creation of an independent Palestinian state. Netanyahu has stated he is only willing to offer minor concessions regarding Palestine, falling far short of an independent state. It is due to this that Saudi Crown Prince Mohammed bin Salman (hereafter referred to as MBS) has told his advisors that he is in “no rush”.

The creation of an independent Palestinian state, of course, requires cooperation from Palestine itself. Many prominent players in the Palestinian political sphere are distinctly uncompromising regarding the issue, particularly as Israeli settlements continue to encroach upon the West Bank. While the Palestinian Authority (PA) displays a level of cooperation with Israel and is the internationally recognized representative of Palestinians, they are a controversial player amongst Palestinians themselves and do not maintain a particularly high level of support from the populace.

Notably, Saudi Arabia in April held a delegation from Hamas, which the US and Israel both consider to be a terrorist group. Shortly after, PA President Mahmoud Abbas was also invited.

With the current political structures of Israel, Palestine, and Saudi Arabia, major concessions by either side are unlikely, though the US maintains hope.

Nuclear Power

One of Saudi Arabia’s demands, which is not new, is a request for US assistance in developing a civilian nuclear program. While the purpose of it would be for nuclear power structures, Israel fears it could pave an easier path forward for Saudi Arabia to develop nuclear weapons.

Israel is the only nation within the Middle East that has nuclear weapons. Though Iran’s pursuit of nuclear weapons is, of course, widely publicized, they have yet to develop them and Israel maintains a significant advantage with the nuclear title they hold (though they have never directly admitted to having nuclear weapons, it is widely believed they have developed them. Notably, Israel has refused to sign the Treaty on the Non-Proliferation of Nuclear Weapons, stating it would be “contrary to their national security interests”).

Saudi Arabia has not announced its intention to pursue a nuclear weapons program as things currently stand, however, MBS has stated that if Iran develops nuclear weapons, the Saudi government will as well.

Security Guarantees

The Middle East is, of course, known to be a particularly volatile place. While recent months have seen incredible leaps in pursuing peaceful diplomacy between Middle Eastern states, Saudi Arabia wishes to seek security guarantees from the US.

The level of security guarantees being offered in the present has not completely been established. Previously, discussions have taken place which would see the US come to Saudi Arabia’s defense militarily, which would require Senate approval.

Saudi Arabia and the US hold particularly unique relations. While the two enjoy numerous positive benefits in their relationship, concessions toward Saudi Arabia have and continue to face resistance from a number of US lawmakers, particularly after the killing of journalist Jamal Khashoggi in 2018, which US intelligence officials say was ordered by MBS himself.

Lesser security guarantees, which would not require senate approval, are still likely to fall under distinct scrutiny within the US.

The American Terms

The primary points of American sought terms pertain to China. Saudi Arabia has been making headlines in recent months with their continually growing relationship with China, something the US seeks to curb. The first of the US demands is that Saudi Arabia continue to price their oil sales exclusively in US dollars. Secondly, the US seeks to limit Saudi use of Chinese technology from Huawei, as well as bar China from establishing military bases in Saudi Arabia.

Oil and the US dollar

Globally, oil is almost always bought and sold using the US dollar (approximately 80% of global sales are done in the US dollar). While the relation between the US dollar, oil, and its effects could make a full other article, shortly put it gives a significant level of strength to the US dollar, and garners the US a lot of foreign, particularly Saudi, investment. Last year, however, Saudi Arabia announced they were considering selling oil to China using the Chinese Yuan rather than the US dollar. Saudi Arabia is the world’s largest oil exporter, and China is its largest customer (over 25% of Saudi Arabia’s exports go to China). Pricing Saudi sales to China in the Yuan would not only be a hit to the US economy and the state of the dollar but also would be a direct challenge to the American dominance of the global oil market.

The move came as relations between Saudi Arabia and the US were worsening, something both sides have since sought to rectify.

Though the Saudi announcement was last year, and the change has not happened, it still appears to be on the mind of the US in present negotiations.

Chinese Military Presence

China continues to grow its presence within Africa and the Middle East. While primarily diplomatic in nature, the US and the UAE have entered a diplomatic spat due to the Chinese construction of a base within the UAE’s borders. The base had previously stopped construction due to US objections, but leaked US documents show that construction continued earlier this year.

As Saudi Arabia grows closer to China, the US is seeking assurance that China will not be allowed a military presence in the nation.

Conclusion

While a peace deal between Saudi Arabia and Israel would be a landmark decision that would undoubtedly change the political landscape of the Middle East, the lack of willingness to compromise both sides have exhibited is worrisome to those hopeful of an agreement.

Regardless if the US is able to properly broker a deal between Israel and Saudi Arabia, the uncompromising approach most Palestinian factions have taken remains a significant inhibitor to any agreed-upon deals being implemented.