Biden's Saudi Arabia visit is more about strategic partnership than oil
I accept that as a reason, but I would be much more direct than that. The fact is that when you have a country that is a strategic partner of yours and has been for a long time, that also matters. And when that country behaves in ways that are more aligned with you strategically, you should recognize that and your behavior should change accordingly. Now, there's no question in my mind that we have had significant differences with the Saudis in the past, and we still do. But Saudi Arabia's also the largest arms purchaser from the United States in the world, and the US is the largest arms exporter in the world. Russia is number two. Won't be for long given their manufacturing and supply chain challenges. So that matters, and that's one of the reasons why the Trump administration had such a good relationship there, as did, frankly, the Obama administration and previous administrations.
And it's not just that. It's also intelligence coordination. It's the Saudis working increasingly closely behind the scenes and at a high level with the Israelis, who are the closest American ally of the United States in the region. Now, on a number of issues over the past couple of years, the Saudis are increasingly, under Mohammed bin Salman, engaging in structural reform. For example, there was a big break in the relationship between Saudi Arabia and the UAE on the one side, and Qatar on the other. The Americans work closely with the Qataris. The Qataris have the most important American military base in the region. Well, that relationship has now improved dramatically. The boycott is over. The Gulf Cooperation Council has been more integrated. That's a positive, not just for the region, but also for the United States and its allies in Europe. That, of course, should be appreciated by the United States. That's positive progress.
So too, the fact that the war in Yemen, which was always a far worse, vastly worse human rights crisis than the slaying of a single journalist, is now in a ceasefire. And that's a positive, and hopefully that ceasefire can stick and we can have less of a humanitarian crisis in what has been an extraordinary proxy war between the Saudis and the Iranians on the ground against the Iran-supported Houthis in Yemen. That's a positive. Also, the social and economic reforms that we're seeing in Saudi Arabia that are getting Saudi citizens to work on diversifying their economy away from fossil fuels and away from petrochemicals, that are getting women into the workplace, that are opening the Saudis culturally from an entertainment perspective, from a sports perspective. These are all things that make it easier to work with the Kingdom of Saudi Arabia that would not be happening unless Mohammed bin Salman and an increasingly competent and coherent cabinet around him, less arbitrarily selected, were in place.
So I'm not suggesting that the Americans and the Saudis are suddenly going to have a kumbaya moment and that we think that the Saudis have become the Scandinavians in terms of human rights, though I also recognize that the US needs to focus more on the strategic partnership piece and a little bit less on the holding true to American values piece, since the US is not doing such a great job in holding true to American values in the United States, given red versus blue on pretty much every issue these days, including the legitimacy of American elections, fundamental and critical to a sustainable Republican democracy. So number one, I completely support this trip, and Biden was the one who was personally dragging his feet. His foreign policy advisors, in cabinet and in the White House, all wanted him to go. He was the one that was reluctant.
He's now finally going. I think it's a good thing. And I hope that progressives in the Democratic Party don't beat up on him too much as a consequence of the trip because it is clearly in America's interest long term to have a more stable and sustainable relationship with all of the countries of the GCC and with Israel in the Middle East. I also though think that it's not appropriate for a president to make his first trip as president to Saudi Arabia, as Trump did when he was president. And look, he was close to the Saudis and they treated him like a king when he went there and he liked that and he's close to the Israelis, and Netanyahu when he was prime minister. They have a personal relationship and had for a long time. I get it, but the Middle East is not the top priority for the United States.
Asia, Europe, and of course the Western hemisphere, all more important for the Americans, especially with the United States as the world's largest energy producer, and especially given the increasing transformation to a post-carbon, renewable energy environment. So yeah, I believe that your first trip to the Middle East isn't in the first couple of months. You first go to Canada and Mexico. You first go to Europe and to Asia and you visit the core allies. But then in relatively short order, three, four, six months out, you make a trip to the Middle East, and of course you go to Israel and you go to Saudi Arabia. That makes a lot of sense to me. It's been kicked down the road and it's been pushed in part by the Russian invasion in Ukraine, and now everyone's talking about it as if there's some big breakthrough coming in oil. I think that the oil piece of this is less important than the broader strategic partnership, not least because oil prices have been coming down over the last few weeks. They're likely to continue to.
There is a lot of oil on the market right now. Concern about oil prices was spiking in part because of worries that there'd be a broad European boycott against all shipping and insurance, which would reduce the supply by millions and millions of barrels a day. That is not coming imminently, and will probably be watered down at least a degree by the potential of having some kind of coordination on waivers from the Europeans in the near term. But also, because the world is probably heading towards a global recession, a mild one, but nonetheless a real one, on the back of the pandemic, the supply chain challenges, the Russia-Ukraine challenges, the inflation challenges. And what that means, with China slowing down dramatically with big problems still, even in Shanghai and other cities on zero-COVID, and with the Europeans probably about to experience a contraction in their economy, and the United States maybe there in 2023, that means less demand for energy.
So will the Saudis put some more oil on the market? I think they will. I think they will together with other OPEC countries and I think there'll be some form of headline announcement when Biden is there. But that's not the big news from this trip, and frankly, it shouldn't be the big news from this trip. So again, all in favor of him going, we'll see how it goes. I suspect it's going to end up being less controversial than people think. It's going to be pretty friendly and we can get back to more normalized relations with a bunch of countries. The Americans have been doing business as if there wasn't a big problem anyway.
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