Saudi Crown Prince Mohammed bin Salman (MBS) has pledged a staggering $600 billion in US investments over the next four years. The MBS announcement followed a phone call with Donald Trump, marking the US President’s first official interaction with a foreign leader during his second term. This move signals a reaffirmation of the close ties between Trump and MBS, with Trump referring to the Saudi crown prince as a “fantastic guy” capable of brokering significant deals and influencing global diplomacy.
During his campaign, Trump claimed he could swiftly end the Russia-Ukraine war, a conflict that has devastated Eastern Europe and sent shockwaves through global markets since its outbreak in 2022.
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Central to Trump’s plan is the idea of reducing oil prices, which he asserts would weaken Russia’s economic foundation and force an end to the fighting. With Saudi Arabia’s significant role in global oil production and its growing diplomatic ambitions, MBS might emerge as a key player in the pursuit of peace.
Why it matters
- The Russia-Ukraine conflict has caused enormous human suffering, disrupted supply chains, and reshaped geopolitical alliances.
- While Ukraine continues to defend its sovereignty, Russia’s economy has largely withstood Western sanctions, thanks in part to revenues from oil exports. Trump’s argument is that cutting oil prices would deprive Moscow of critical resources, forcing it to reconsider its military campaign.
- Saudi Arabia, as a leading member of OPEC+, holds considerable sway over global oil markets. By adjusting production levels or pricing strategies, the kingdom could exert economic pressure on Russia.
- MBS has previously demonstrated his willingness to engage in international mediation, notably in facilitating a prisoner exchange between Russia and Ukraine in 2022. These credentials, combined with Saudi Arabia’s strategic importance, make MBS a plausible intermediary in this high-stakes conflict.
- However, reducing oil prices is no simple task. Saudi Arabia’s economy is heavily dependent on oil revenues, and slashing prices could impact its ambitious Vision 2030 plan, which seeks to diversify the economy. Additionally, any move to challenge Russia’s position within OPEC+ might strain Riyadh’s ties with Moscow, complicating efforts to mediate peace.
The big picture
Trump’s proposal to lower oil prices reflects his broader philosophy of using economic tools to achieve geopolitical goals.
If the price came down, the Russia-Ukraine war would end immediately.
Trump at the World Economic Forum in Davos
While this Trump assertion may oversimplify the conflict’s complexities, it underscores his belief in transactional diplomacy.
During his first term, Trump cultivated a close relationship with Saudi Arabia, making it his first foreign destination as president in 2017. This unconventional choice underscored his administration’s focus on fostering ties with Gulf allies. Saudi Arabia responded by committing to significant arms deals and investments, laying the groundwork for a deep partnership. Now, with $600 billion in fresh investment commitments and the possibility of more, Trump sees an opportunity to leverage Riyadh’s influence to address global challenges like the war in Ukraine.
For Saudi Arabia, aligning with Trump’s vision offers both risks and rewards. On one hand, deepening economic ties with the US enhances the kingdom’s standing as a global player and reinforces its partnership with Washington. On the other hand, actively intervening in the Russia-Ukraine conflict could alienate Russia, a key partner in OPEC+, and disrupt delicate regional balances.
What they’re saying
- Trump’s framing of MBS as a “fantastic guy” capable of major deals reflects his transactional approach to foreign policy. He has expressed confidence in Saudi Arabia’s ability to contribute meaningfully to global stability while advancing US interests.
- “I’ll be asking the crown prince, who’s a fantastic guy, to round it out to $1 trillion… We’ve been very good to them,” Trump remarked at Davos, suggesting that Saudi investments could grow even further under his administration.
- Analysts, however, remain cautious about the feasibility of Trump’s strategy. As per a Bloomberg report, Paul Salem, vice president of the Middle East Institute, noted, “Saudi Arabia’s role could bring new dynamics, but economic leverage alone may not suffice for a lasting resolution.” Energy experts have also pointed out that oil prices are influenced by a multitude of factors, including demand fluctuations and geopolitical events, making it difficult for any single nation to dictate outcomes.
- Meanwhile, critics have questioned the ethical implications of relying on Saudi Arabia as a mediator. MBS’s record on human rights, including the killing of journalist Jamal Khashoggi, remains a point of contention, particularly among Western policymakers. Nonetheless, Trump’s willingness to prioritize economic and strategic considerations over such concerns highlights his pragmatic, if controversial, approach.
Challenges ahead
While the idea of using Saudi Arabia’s oil influence to end the war is compelling, it faces several significant hurdles:
1. OPEC dynamics
Saudi Arabia operates within the OPEC+ framework, which requires consensus among member states on production levels. Convincing other nations, including Russia, to agree to significant price reductions may prove difficult, particularly if they perceive such moves as detrimental to their own interests.
2. Saudi economic priorities
MBS’s Vision 2030 plan aims to transform Saudi Arabia’s economy by investing heavily in infrastructure, technology, and tourism. Achieving these goals requires stable oil revenues. Any drastic reduction in prices could hinder the kingdom’s ability to fund these initiatives, creating a conflict between domestic priorities and international expectations.
3. Geopolitical complexity
The Russia-Ukraine war is not solely an economic conflict; it is rooted in issues of sovereignty, territorial integrity, and national security. While economic pressure can influence decision-making, achieving a lasting peace will require addressing these underlying political and strategic concerns.
4. International perceptions
Saudi Arabia’s involvement in the war could face resistance from other global powers, particularly if it is seen as aligning too closely with US interests. Balancing its role as a mediator with its desire to maintain neutrality will be a delicate task for Riyadh.
From what I hear, Putin would like to see me, and we’ll leave as soon as we can. I’d meet immediately. Everyday we don’t meet, soldiers are being killed in the battlefield. It’s a carnage. And we really have to stop that war.
Donald Trump
What’s next
Ending the Russia-Ukraine war is not solely in hands of Trump and MBS. At the best, both these leaders can hope to play a peripheral role only.
Trump has claimed that Ukrainian President Volodymyr Zelenskyy had told him he was ready to make a deal to end the war. Meanwhile, The Kremlin announced on Friday that Russian President Vladimir Putin is ready to hold talks with US President Donald Trump but is waiting for “signals” from Washington. Kremlin spokesperson Dmitry Peskov told reporters, “Putin is ready. We are waiting for signals,” from the US.
There is no denying that Trump can persuade Putin and Zelenskyy to have a meet to discuss the end of the war. Ultimately, it will have to be settled between Russia and Ukraine.
Trump’s warm relationship with MBS, coupled with his past engagements with Putin, forms the basis of a high-stakes gamble: but can his unique approach can succeed where others have failed? We will have to wait and watch.
(With inputs from agencies)