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The new Biden Administration has largely been focused on fulfilling its election promises in its first month in power. After reversing an extensive list of Trump policies via executive orders, Biden is now focusing on the Middle East. In stark contrast to his predecessor, Joe Bidens administration is taking a reserved and diplomatic approach towards the ongoing crisis in the Middle East region. While the new administration is yet to fully address Iranian Sanctions or the JCPOA-agreement, it has stepped up the pressure on some Arab countries by temporarily blocking U.S. arms sales to Saudi Arabia and the UAE. In yesterdays historic speech, Biden addressed U.S. military support for the Saudi-led anti-Houthi alliance currently fighting in Yemen. International media has been largely focused on the perceived hard-line position taken by Biden.

By removing full-scale offensive military support for Saudi forces, Washington seems to be pushing for a diplomatic solution to the conflict, in which Saudi Arabia, the UAE, and others are fighting a proxy war against the Iranian supported Houthi forces. Diplomatic sources indicate that the move is a "routine administrative action", noting that it was standard for incoming administrations to review large arms deals initiated by outgoing administrations. Still, Bidens moves are not going to go down very well in the respective Arab Gulf capitals. Other major players, such as Egypt, Israel, and Jordan will be watching Bidens moves carefully in the coming months. Among the sales that have been put on hold is a massive $23-billion (19-billion) deal to supply the UAE with 50 Lockheed-Martin F-35 stealth fighter jets. The deal was made in the final days of the Trump presidency, after the November 6 election. It remains unclear whether or not other Trump arms deals are also going to be targeted, such as the December 29, 2020 approved potential sale of 3,000 precision-guided missiles, worth as much as $290 million, to Saudi Arabia.

The reaction from Arab governments to yesterdays Biden speech have been very positive, as was expected. None of the countries involved are willing to put their relationship with Washington at risk. Saudi Arabias Minister of State for Foreign Affairs, Adel Al Jubeir, stated that Bidens historic speech confirms Americas commitment to work with friends and allies on resolving conflicts. Hi words carried a tacit but clear undertone that Washington not forget the larger picture, which includes both Iran and Iraq, and focuses on both geopolitics and energy.

In the coming weeks and months, the Biden Administration will be focusing on the JCPOA agreement and its constraints. While Democrats and European nations may be hoping for a fast revamp of the Iran deal, there are significant hurdles in the way of achieving such a feat. First of all, the former JCPOA agreement has already been attacked by several European nations due to a lack of control mechanisms. Secondly, Irans growing missile capabilities, which have already been used in Iraq, Syria, Yemen, and Lebanon, are a major concern for any potential JCPOA signatories. Thirdly, Irans current posture with regards to nuclear enrichment will discourage Washington, France, and Germany from coming to the table. While none of these issues are particularly new, Bidens position on all of them remains unclear, and will likely depend on his broader foreign policy in the Middle East.

The Biden Administrations role and relationship with the Arab Gulf states is yet to be established. The postponement of arms deliveries and the blockage of so-called offensive arms to Saudi Arabia, and potentially others, could be setting the scene for a potential political crisis in the region. If this relative aggression towards Arab Gulf nations is combined with a more positive attitude towards Iran, without adressing the concerns of Saudi Arabia-UAE-Israel and Egypt, then Washington will risk losing its key allies in the region. Since the Obama era, the traditionally friendly security and economic relationships between Washington and the GCC region have been severely weakened. A new perceived pro-Iranian and anti-Arab strategy could lead to Washington coming under fire in the Middle East.

It is not only U.S. interests in the region that could be threatened by a new course of action in the Middle East, but also the U.S. and European economies. A new pro-Iranian vision of the Middle East could give birth in the GCC arena to a willingness to increase already growing cooperation with Russia, China, and India. Strategic posturing could also result in a less lenient approach from Arab oil nations towards Bidens energy strategies and the U.S. shale recovery. OPEC+ is evidence of the growing economic strength of non-U.S. economies. Broad support from the U.S. for a new JCPOA agreement and increasing pressure on Arab regimes would only increase this new economic force and could also lead to a very volatile oil and gas market. President Biden will have to play his hand carefully in the Middle East to avoid global economic and geopolitical ramifications.

By Cyril Widdershoven for Oilprice.com

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