Syllabus: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.
Historical Background
- The U.S.–Saudi partnership is among the oldest transactional alliances, predating the UN, NATO, and Bretton Woods institutions.
- It began as a secret “oil-for-security” pact in 1945 between Roosevelt and King Abdul Aziz.
- Originally set for 60 years, the agreement was renewed in 2005.
Evolution of Bilateral Ties
- Relationship has seen phases of tension: 1973 oil embargo, Saudi missile purchase from China in 1980s, and supply restrictions during the Yemen war.
- The Khashoggi killing (2018) strained ties, leading to Saudi diversification towards China and Russia.
- U.S. support for Israel’s Gaza operations further complicated trust.
Shift under Trump Presidency
- Trump’s second-term outreach transformed bilateral chemistry with MbS.
- Trump’s 2025 visit produced $142 billion in defence deals and $270 billion in investment agreements.
- Saudi Arabia pledged to raise its future U.S. investments to $1 trillion, nearly equivalent to its current GDP.
- A Strategic Defence Agreement designated Saudi Arabia as a major non-NATO ally, with U.S. assistance in case of attack.
- Progress was reported on civil nuclear cooperation and AI chip supply.
Limitations and Underlying Frictions
- Observers question the feasibility of the announced commitments due to economic constraints and Trump’s hyperbolic style.
- Key disputes on oil supply, Iran, and Saudi–Israel normalisation were deliberately muted.
- Absence of a joint communiqué signalled remaining fault lines.
Regional Implications
- MbS’s assertive diplomacy strengthened after Israel’s operations weakened Iran.
- Saudi lobbying led to the U.S. reconsidering sanctions on Syria and showing interest in ending the Sudan civil war.
- Iran even sought MbS’s mediation for renewed nuclear talks with Washington.
Impact on India
- Possible access of advanced U.S. weapons to Pakistan remains a concern.
- India prefers low oil prices, yet stable moderate prices may still be manageable.
- Saudi Arabia’s Vision 2030 offers opportunities in AI and technology.
- Reduced Chinese influence in Saudi Arabia could benefit India.
- Improved Saudi–Israel understanding may aid the India–Middle East–Europe Economic Corridor (IMEC).