Following the fall of Saddam Hussein’s government in Iraq, the Middle East had further destabilized as Saudi-sponsored Salafis and Iranian-sponsored Shia Militias took up arms in an attempt to take control of a now weakened Iraq. The centerpiece of Iranian strategy and foreign policy includes the funneling of arms and money to its proxies in the region. Thus, the goal of American sanctions on the Iranian Regime is to cut down its ability to fund regional terror groups to give American allies an upper hand in this Middle Eastern cold war.
Along with ambitions for regional control, the Iranian Regime has also sought the creation of its own nuclear arsenal. However, its nuclear program was not created without setbacks. In July 2020, Israeli intelligence allegedly carried out a sabotage operation that led to the explosion of Iran’s Natanz uranium enrichment facility setting back the nuclear program by two years. On November 27, 2020, Iran’s top nuclear scientist, Mohsen Fakhrizadeh had been assassinated by the Israeli Mossad.
At the center of the Middle Eastern conflict, Israel is a nation that is surrounded by enemies and is known to be hawkish on foreign policy. Having been in direct and indirect conflict with its neighbors, the Israeli Defense Forces have no desire to allow them to have access to nuclear weapons. With no room for any error, Israeli intelligence and military forces have used innovative ways to set back and sabotage nuclear buildups in the region.
After being sworn into office, the Biden Administration had pledged to revive the Obama Administration’s 2015 Iran Nuclear Deal which promised to remove sanctions if Iran reduces its uranium enrichment. While Iran’s nuclear arms development would be slowed, it would allow Iran to continue funneling arms and cash to foreign terror groups across the Middle East.
With rising gas prices and the Biden Administration’s unwillingness to pump more oil domestically, the Biden Administration is now at the mercy of foreign oil producers like Saudi Arabia. While Saudi Arabia is aligned with American interests, Biden’s attempt to revive the nuclear deal would undermine Saudi interests in containing Iran. Even more alarming, the Saudi government as a result has been drifting away from the West and looking for other partners.
Recently, the Saudi Government has sought new markets in China as they have grown increasingly unhappy with the Biden Administration. Riyadh’s many talks with Bejing included the possibility of accepting Chinese yuan instead of U.S. Dollars. This move would undermine the dominance of the American currency and allow the yuan to challenge the dollar on the world stage.
Riyadh’s shift toward China cannot be blamed on Putin but rather in protest of shifting U.S. Foreign Policy in the region: Withdrawal from Afghanistan, the Iran Nuclear Deal and the murder of Jamal Khashoggi. All of these policies have been disasters in the eyes of Riyadh and a warning to search for other allies.
Thus, with relations at a low, any attempt to get oil producers like Saudi Arabia to increase production is unlikely to yield any results. Furthermore, as Saudi relations sour with Washington, a possible petroyuan will weaken the dollar’s ability to unify global markets.
It is true that Iran had been able to circumvent U.S. sanctions by selling oil to Russia, China, and India who also happen to have markets in Europe. However, as a result of the sanctions from the war in Ukraine, Russian oil companies have sought markets in India and China placing them in competition with Iran. As a result, Iranian oil companies have been forced to slash crude oil prices by up to $6 per barrel to be competitive.
With Iran already boxed in, they have already been forced to discount their oil prices prior to the war. Increased Russian competition in China has only worsened their position. If anything, this would be the worst time for the Biden Administration to remove sanctions on Iran when they are hurting them the most. Thus, an attempt to revive the Iranian Nuclear Deal would undermine Saudi priorities at a particularly critical point.
The house of Saud may be a brutal and repressive monarchy that is no better than the regimes of Iran, China or Russia. However, as a key ally and a major exporter of oil, a shift in policy away from Saudi Arabia is going to create fundamental problems. When we continue to undermine the interests of our allies we can’t be surprised when they don’t want to help us.
If the Biden Administration wishes to “renew American Leadership” on the world stage, we need to stop undermining our allies, our foreign policy and our strategic goals. The United States needs to be both a reliable ally and a reliable threat. Unfortunately, this is something that the gaffing Biden Administration does not offer.