Recent movements on the US stock market resemble President Donald Trump’s famously spiky signature – sharp, jagged and erratic – but mostly in red, rather than the black ink of the White House.
For the Gulf there is another red line being watched closely – the price of oil, where the downward trend is exacerbated by the Opec+ decision to defy caution and increase production. It looks like we are heading for $60 per barrel. And then what?
In such circumstances it is a foolish op-ed writer who does not express exasperation and fear that Trump’s tariff-centric economic policies are going to produce a worldwide recession.
Publicly at least, the leaders of the Gulf states have gone quiet, all the more so because President Trump is planning to visit the Gulf in mid-May, the first foreign trip of his second administration. Saudi Arabia, Qatar and the UAE are the intended destinations.
Hope springs eternal that the visits will be full of smiles and warm handshakes, but the reception of Benjamin Netanyahu, Israel’s prime minister, at the White House on April 7 suggests otherwise. Trump announced at the press huddle in the Oval Office that the US was going to have “direct” talks with Iran on the nuclear issue this weekend.
The American diplomatic invitation went via the UAE but the response came back via Oman, which seems to be where the talks – direct, semi-direct or indirect – will take place. Steve Witkoff, the president’s billionaire property magnate mate, is the apparent chosen interlocutor. (He also handles Russia, Ukraine and Gaza – he is a busy man.)
Having hoped for a celebration of his own close relationship with the president, a discomfited Netanyahu, who believes in military action against Iran rather than diplomacy, also had to smile when Trump announced that President Recep Tayyip Erdoğan of Turkey, who is hyper-critical of Israel, was a very good friend.
Political leaders don’t like public embarrassment – and Gulf emirs, crown princes and sheikhs are no exception to this. One can only imagine the amount of staff work being set up to handle the promised meetings and the agendas. (Netanyahu didn’t know about the planned talks with Iran until he arrived in the US. He apparently hoped for tariff concessions – and got none.)
Chris Wright, the US energy secretary, heads to the Middle East today for a trip that will last nearly two weeks. His itinerary includes visits to Saudi Arabia, Qatar and the UAE, with a planned stop at Abu Dhabi’s nuclear power plant, where a fourth South Korean-built reactor has recently come online.
Saudi Arabia continues to seek access to US civil nuclear technology, but Crown Prince Mohammed bin Salman has warned that if Iran develops a nuclear weapon, the kingdom will follow suit.
Wright is an interesting appointment in that his particular experience is in fracking, so arguably he knows more about his cabinet responsibility than some of his colleagues. He will also be sensitive to price because, without decent support, fracking is uneconomic.
From a Gulf point of view, the countries want to maintain a good level of demand for both oil and natural gas from Asia. If recession looms, that demand may evaporate.
Most Asian countries are merely economic partners of the Gulf states, but the exceptions are China and, to a lesser extent, India. President Trump’s planned visit is presumably in part to stop Washington’s influence being undermined by Beijing. It looks to be a long-term challenge.
With four or five weeks to go before the Trump trip, many things can crop up to alter the schedule of the agendas. Almost anything could happen.
“Expect the unexpected” was a line I used in an AGBI op-ed in January, four days after Trump’s inauguration. I was reminded of it by the interviewer during a live, simultaneously translated interview I had with BBC Persian Television on April 6. That’s the channel broadcast into Iran and possibly watched by an ayatollah or two, and probably the intelligence side of the Revolutionary Guards.
The phrase certainly covers Trump’s continuing diplomatic style. It is perhaps important to remember that the Saudis, Qataris and the Emiratis will be mindful of it in their planning during the run-up to his Gulf visit. And the Iranians as well.
Simon Henderson is director of the Gulf and energy policy programme at the Washington Institute for Near East Policy
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