Event    

Three months after taking office, the Biden administration is still outlining its Middle East strategy. In reviewing the USA’s role in the Middle East, three shifts are becoming clear. Firstly, the Biden administration is seeking to de-escalate tensions inflamed by the Trump administration, most notably in relation to Iran. Secondly, it is trying to reduce the US foreign policy focus on the Middle East. Thirdly, it is keeping its regional ally Saudi Arabia more at arm’s length. Nevertheless, apart from wanting to re-implement the nuclear agreement with Iran, no fundamental shift in the US regional strategy is expected.

Impact

Consecutive US presidents have tried to move US foreign policy focus away from the Middle East and towards Asia to counter China’s growing regional influence. For Biden’s presidency, this is also the case as he is evaluating how to reduce US involvement in the region while still protecting its vital interests. However, previous presidents have noticed that strategic relationships, security concerns, and political events have kept the region clearly in the picture. When the Obama administration tried to move its focus to Asia, the Arab Spring, the Syrian Civil War, the rise of the Islamic State (IS) in Iraq and Iran’s nuclear programme kept the region in focus. Two developments however help the new administration. For years the region’s oil reserves have been considered a vital security concern for the USA. While this remains the case, the shale boom made the USA a net exporter of both crude oil and gas, thereby reducing the strategic importance of the Middle East. Secondly, its support for Israel has become less of a worry as the country has its security position clearly under control and has developed formal ties with many of its Arab neighbours. Nevertheless, a shift away from the region will require a careful balancing act, as multiple vital interests remain, most notably in relation to Iran and Iraq.

Most notably the USA continues to try to contain Iran’s support for Shia militias in the region and want to prevent Iran from developing a nuclear weapon. The Trump administration tried this by withdrawing from the nuclear agreement in 2018 and by starting what it called a “maximum pressure” campaign with unprecedented sanctions towards the country. Now, the Biden administration is trying to de-escalate tensions as it is looking for a way to re-implement the Join Comprehensive Plan of Action (JCPOA) without losing face. While it is likely that an agreement will be reached, this is expected to take time as Iran is resisting the call for multilateral negotiations and both sides want the other to take the first step in re-implementing the agreement, as currently both sides are no longer complying. Additionally, while the Iranian economy is still suffering from the impact of the re-imposition of US sanctions as well as from the fallout from Covid-19, presidential and parliamentary elections will be held in Iran in June. There is a strong possibility that a hardliner will take power after 8 years of Rouhani’s moderate presidency. A removal of US sanctions could however improve the economy. In such circumstances, Credendo would be likely to upgrade its ST political risk classification for Iran, which is currently in category 7/7. Biden’s presidency has also chosen to de-escalate tensions in other parts of the region. For example, by announcing that the USA will resume aid to the Palestinians and will improve diplomatic relations after these were severed under the Trump administration. Nevertheless, the Israeli-Palestinian conflict is not expected to take a central stage in the coming four years as president Biden saw how subsequent presidents failed to find a solution to the conflict.

The evolution of the USA-Iran relations has a significant impact on the security situation in Iraq. Indeed, Iran has strongly expanded its influence in Iraq after the rise of the IS through its control of the Popular Mobilization Forces (PMF) that fought the IS. Since then, Shia militias have been loosely integrated in the Iraqi Ministry of Defence. Tensions between the USA and Iran have run high in Iraq especially after the attack on the US Embassy in December 2019, the assassination of the Iranian General Qasem Soleimani in January 2020 and more recently the attack on US forces in Erbil airport by a militia supported by Iran. In this context, any ease in US-Iranian tensions would have a positive impact on Iraq and hence on the political violence risk of Iraq – which is currently classified in category 6/7 – and thereby also on the short-term and medium- to long-term political risk, which are currently also in category 6/7.

A notable change from the Trump administration is to find in the relation towards Saudi Arabia’s Crown Prince Mohammed bin Salman. While the Trump administration had very close links with the Crown Prince, the Biden administration indicated that from now on, the US president would deal with his Saudi “counterpart”, Prince Mohammed’s father, King Salman. This happened after it froze US arms sales to Saudi Arabia and the United Arab Emirates, ended US support for the War in Yemen and declassified a US intelligence report that implicated Mohammad bin Salman in the killing of the Saudi journalist Jamal Khashoggi. Within Saudi Arabia, this is expected to have little impact, Mohammed bin Salman has strongly consolidated his power and is likely to continue to play a dominant role in Saudi politics as the expected future ruler of the country. Strategically US support to Saudi Arabia remains strong, when Houthi rebels attacked a Saudi airport and oil facilities with drones and missile launches in February and March, the new US Secretary of State Antony Blinken was quick to reiterate US support for Saudi Arabia’s security. This will not change under Biden’s presidency but at the same time the Saudi monarch now realises that US support is not as unconditional as it was under the Trump administration, Saudi Arabia is expected to choose a more careful and prudential foreign policy course. We could thus also see Saudi Arabia’s decision to restore ties with Qatar, another US ally in the region, in this light.

Analyst: Jan-Pieter Laleman – jp.laleman@credendo.com