MESOP MIDEAST WATCH: The War in Ukraine &Strategic Hedging by Arab Countries

The war in Ukraine has accelerated the strategic hedging by Arab states, even at the risk of (temporarily?) harming their relations with the United States. Does this policy overreach its mark, and will the United States ultimately want to settle the score with these states? How does this foreign

 Yoel Guzansky INSTITUTE FOR NATIONAL SECURITY STUDIES- INSS Insight No. 1575, March 21, 2022

Central Arab countries that are seen as pro-Western have chosen an ostensibly neutral position regarding the war in Ukraine. Several oil producers in the Gulf have gone even further and seek to take advantage of the war to improve their standing. Even though most Arab countries still see their relations with the United States as a central element of their security, they are concerned about the reduced US attention toward the Middle East in general and their security problems in particular, and are now trying to establish a new equation in their relations with Washington. This hedging policy – a fixed element in their political toolkit – aims to make use of Russia (and China) as an additional source of political, economic, and even military support, and use this to pressure the United States to adjust its policy. This policy of several Arab countries that have relations with Israel attests to the change that has already taken place in the United States’ standing in the region and necessitates Israeli attention.

Since the outbreak of the war in Ukraine, many Arab leaders that are seen as “pragmatic” and pro-American have refrained from criticizing Russia and sought to distance themselves as much as possible from the crisis between Moscow and the West. Some have even dragged their feet and not cooperated with United States attempts to isolate Russia politically and economically. Although it is too soon to envision the long-term ramifications of the Russian invasion of Ukraine for the Middle East, it is important to examine possible directions of development, with an emphasis on the standing of Arab countries and the role of the great powers in the region.

Aside from Syria and the Houthis in Yemen, who have expressed full support for Russia, the Arab countries have sought to maneuver between the poles – to maintain their core relations with the United States while not harming their developing relations with Russia. Regarding the fighting in Ukraine, the Arab League has so far been satisfied with supporting humanitarian efforts and calling for a diplomatic solution, but has refrained from condemning or even mentioning Russia by name in its statement on the issue. Several senior officials in the region even publicly expressed their sentiments: “Maybe it doesn’t resonate too well in Washington, but that’s the way things are going to be from now,” said an Emirati professor whose positions are known to reflect those of the government. Anwar Gargash, a senior advisor to the ruler of the United Arab Emirates, justified his country’s policy by saying that “choosing a side at present will only lead to more violence.” Yousef al Otaiba, the UAE ambassador to the United States, even admitted that relations between his country and the United States are currently undergoing a “stress test.” Crown Prince and de facto leader of Saudi Arabia Mohammed bin Salman, who is currently courted by the West, emphasized the importance of the ties with the United States but insisted that Washington has no right to preach to him or to intervene in the kingdom’s internal affairs.

The United Arab Emirates highlighted its close relations with the Russian leadership, made (temporary) gestures toward Moscow, allowed it to bypass some of the sanctions, and even claimed, like Egypt, that the sides should strive for a political compromise – thereby implying that Russia too has legitimate claims and that Ukraine should compromise. The UAE abstained in the UN Security Council vote on the resolution to condemn Russia. This position taken by the UAE – current president and temporary member of the Security Council – was connected in part to its desire to receive Russia’s support for extending the weapons embargo on the Houthis in Yemen. Subsequently, however, heavy American pressure led the UAE, along with Saudi Arabia and Egypt, to support the condemnation of Russia at the General Assembly.

In the background of these stances are changes in the foreign policy of several Arab countries, at whose core is the need to adjust to changing circumstances, chiefly the stand of Russia and China in the region, strengthening at the expense of the United States. A central event that was interpreted as evidence of Washington’s dubious credibility in protecting Arab states’ security was its lack of a military response to the Iranian attack on the strategic oil facilities in Saudi Arabia in 2019. The view that Arab countries cannot depend on the United States to come to their aid if they are attacked by Iran has been strengthened by the events in Ukraine and is reflected in the writing of central columnists in the Arab press.

This strategic hedging by Arab countries has been reflected in recent years in strengthened relations with China and Russia. They cooperate with Russia on regulating oil prices, acquire weapons from it, and enjoy Russian tourism. The UAE in particular has formed close relations with Syrian President Bashar al-Assad, Russia’s ally, and it has reportedly funded the activity of the Wagner Russian mercenary force in Libya. Perhaps another advantage of Russia in the eyes of the Arab countries is the Russian willingness to use force, and unlike the United States, to use military leverage to achieve political objectives. And recently, the United Arab Emirates suspended talks on acquiring F-35 aircraft, which were part of the grant it received when it agreed to sign the Abraham Accords. With surprising timing, on the day of the Russian invasion of Ukraine, it was reported that UAE would acquire the Chinese L15 fighter/training aircraft. Saudi Arabia also took advantage of the war to signal to the United States that it has other options. Chinese President Xi Jinping was invited to visit the kingdom after the end of Ramadan, and Riyadh even announced that from now on it is considering pricing oil deals with China (the central customer of Saudi oil) in the Chinese yuan instead of the American dollar, as was the case until now.

Significant immediate effects of the war in Ukraine include sharp fluctuations in energy prices (at the beginning of the war, the price of a barrel of Brent Crude oil reached $128, but has since declined and is currently at about $100). While this development positively affects oil producers, Arab countries that import oil are negatively affected and could experience popular unrest as the crisis continues. The rise in oil prices will enable the Gulf countries, Libya, and Algeria to cover deficits that they accumulated in recent years and undertake necessary projects. The war again illustrates the strategic importance of the Gulf to the global energy economy and the increasing potential value of the Arab Gulf countries.

In this context, Washington has urged the United Arab Emirates and Saudi Arabia, the world’s largest oil exporter (whose swing capacity is estimated at about 2 million barrels of oil per day), to increase their oil production in order to try to mitigate the  rise in oil prices that occurred at the beginning of the war, but so far in vain. The countries have emphasized their commitment to agreements with Russia, which is a member of OPEC+ (as are they) regarding oil production quotas. Reportedly on several occasions the rulers of Saudi Arabia and the United Arab Emirates have even refused to speak with Biden. Perhaps this refusal stems more from their desire to improve their bargaining position vis-à-vis the United States. In this context, the expectation of Iranian oil entering markets after a nuclear agreement with Iran is reached should be taken into account, along with the need that will then arise to adjust the oil export quotas to new conditions.

Indeed, while the world’s attention is directed toward Ukraine, the concerns of Arab countries are related to the emerging nuclear agreement, which they expect to benefit Iran, and which does not deal with the issues of terrorism, subversion, and the proliferation of missiles/UAVs – which are all ascribed to Tehran. The Gulf countries in particular are consequently seeking adequate compensation for toeing the line with the American position, in the form of increased intelligence cooperation and strengthened defensive capabilities. Saudi Arabia likewise expects both American aid in developing a nuclear program and reconciliation between Washington and the kingdom’s de-facto leader Mohammed bin Salman, including providing him with immunity from possible legal prosecution in the United States due to his involvement in the murder of Jamal Khashoggi.

Furthermore, the war in Ukraine could aggravate an already difficult reality around the Middle East and threaten the food security of many of the region’s residents. This is compounded by the intervention of speculators and panic among citizens, which could further heighten a rise in prices that have already increased in the past two years. Weak countries, which at any rate have not yet recovered from the COVID-19 crisis, are mainly worried about the rise in energy and grain prices. The war has already led to a rise in the (unregulated) price of bread in Egypt, which is the largest wheat importer in the world, and in Tunisia. The concern regards possible popular unrest due to a rise in food prices, which in the past, in combination with other social problems, triggered protests and riots in Jordan, Egypt, Morocco, and Tunisia and could threaten the stability of the regimes. It is possible that in order to prevent unrest, poorer countries in the Arab world such as Egypt and Jordan will increase their economic dependence on the Gulf countries. This dependence would likely be accompanied by adjustments toward the political policies of the Gulf countries.

Central Arab countries will likely continue to work on diversifying their political, economic, and even military mainstays, while spurring the United States to prove its credibility as an ally and establish a “new” equation of relations that improves their standing. The choice of conspicuous “neutrality” by some Arab countries indicates a change that has already taken place in the United States standing in the Middle East. Most Arab countries recognize that at present there is no good replacement for the superiority of the United States, and they still see close relations with it as central element of their security – despite Washington’s reduced attention toward the region in general and their security problems in particular. In their view, they must compensate for this deficiency in several ways: intensifying their military power, maintaining proper relations with Iran, and strengthening their relations with other countries and great powers alongside their relations with the United States. In other words, even if the United States renews its attention toward the Middle East after the war, and as part of this goes a long way toward Arab countries, the rise in the involvement of other great powers in the region is expected to continue, and with it, Arab policies of hedging risks and opportunities.