Risky Business: Saudi Arabia’s Oil Price Hike and Market Reaction

As the world’s leading energy exporter, Saudi Arabia’s decision to raise the price of oil for its Asian customers, namely China and India, is a significant development. The surprise move, announced ahead of the much-anticipated OPEC+ meeting on June 2, saw Saudi Aramco increase the price of Arab Light crude for Asia customers by over 300 percent—from $0.90 to $2.90 per barrel above the Oman-Dubai benchmark. Saudi officials cited strengthening oil benchmarks, particularly the price of Dubai-Oman crude, to justify the price hike. However, a more likely underlying motive would be Saudi Arabia’s desire to maintain high oil prices in the face of the ongoing war on Gaza and the potential for further destabilization across the Middle East, which pose a serious threat to global oil markets and the country’s economy—although the attempt to secure its own economic well-being will certainly buy it no friends to the east.

Local Stability Shapes Oil Markets

The impact of the war on Gaza on global oil markets has perhaps been less significant than its wider political ramifications for the region. Since the outbreak of the conflict, the average price of the OPEC basket dropped by $6 per barrel, or about seven percent. However, these trends have prompted global and regional powers like the United States, Turkey, Qatar, and Saudi Arabia to intervene and stabilize prices.  Indeed, the continuation of tensions in the region could lead to a more pronounced slide in oil prices, which would impact the finances of several Gulf states. In this vein, Saudi Arabia’s increase in prices is probably intended to guarantee that oil prices will remain stable to avoid a domestic economic crisis.

Saudi Arabia’s decision had an immediate impact on the outlook of its top customer, China. The unexpected price hike led China to reduce its imports of Saudi oil in June compared to May 2024. A significant shift in Chinese import activity could potentially disrupt global oil trade dynamics, as China turns instead to Russia to meet its energy needs. Indeed, Beijing is expected to increase its oil imports from Russia, China’s top supplier for many years, by 2.1 million barrels per day (bpd) compared with the January-July period in 2023. China’s growing hydrocarbon links to the Kremlin fit a clear trend. In 2023, Beijing imported 107 million tons of crude oil from Moscow—a 24 percent increase from 2022. Moreover, in 2023, China imported eight million tons of liquefied natural gas (LNG) from Russia, a 77 percent increase from 2021. These purchases helped to diversify China’s supplies of oil and gas and strengthen its shaky post-COVID economic recovery; they also extended an economic lifeline to Russia, which obtains nearly half of its annual revenue from the hydrocarbon trade, during its period of unprecedented international isolation following the invasion of Ukraine. The two nations’ mutual reliance—China on Russian oil, and Russia on badly-needed Chinese funds—will likely increase as the war drags on.

Domestic Demand, International Isolation

Though many experts have linked Saudi Arabia’s oil price increase to geopolitical turmoil, another crucial reason behind this decision lies closer to home. Saudi Arabia’s leadership likely hopes to stock the country with adequate volumes of crude to burn for electricity in the coming months. In this vein, the Saudi authorities are hoping to maintain the Brent crude oil price between $102 and $104 per barrel—an ideal range to prevent budget shortages. Therefore, during the upcoming OPEC+ meeting in June, one can expect the Saudi authorities to pressure all parties to cut oil production until global oil prices rise to a level more friendly to their budget. In spite of these aggressive tactics, Riyadh may not be able to raise oil prices singlehandedly. Even if it cuts production and exports, Russia will continue to meet Chinese demand, while other Asian customers will find alternative suppliers—the United States, Brazil, or even others in the Middle East—willing to sell at a lower price.

Observers remain divided on the potential implications of Saudi Arabia’s price hike. Some predict that it could lead to a potential supply squeeze, particularly given the instability that has gripped the Middle East over the last six months. This is a significant concern, as it could disrupt global oil supplies, compounding the effects of the ongoing war in Ukraine. Analyst predictions suggest that the global demand for oil supply will increase during the summer period—leading some countries in OPEC+ to advocate for a production increase, rather than cuts. Riyadh is expected to resist such moves, but it is unclear how much leverage the Kingdom maintains over its partners in the cartel.

Unfortunately for Saudi policymakers, the Kingdom’s efforts to cut oil production coincide with several initiatives that require the buy-in of regional states. Riyadh is simultaneously encouraging a ceasefire in the Gaza Strip and attempting to deter the Yemen-based Houthi rebels’ attacks in the Red Sea to allow the safe export of oil. However, Israel’s ongoing operation in Rafah, as well as Tel Aviv’s commitment not to withdraw its forces until Hamas is fully eradicated and its equivocal answer to the recent ceasefire proposal promoted by U.S. President Biden, suggest that the conflict will not die down any time soon.

In short, by raising prices for its flagship crude destined for Asia, Saudi Arabia is demonstrating a certain degree of strategic foresight, padding its bottom line ahead of an unclear period in global hydrocarbon markets. However, the country is not all-powerful over the oil trade, and its customers are clearly not content to simply pay the higher price that Riyadh has imposed on them. It remains to be seen whether this gamble—on top of the country’s other risky initiatives in regional diplomacy—will pay off in the long run.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.

Gulf States and Diplomatic Challenges Post-Gaza War: Paving the Way for Peace

Discussions about “day after” scenarios for Gaza have dominated diplomatic circles ever since Israel launched its invasion of the exclave in retaliation for the October 7 attacks. When this horrific war finally comes to an end, there will be challenging questions to address regarding the political situation for Israelis and Palestinians—and immense pressure on both sides to ensure that such a war never happens again.

Making the Case for Two States

Is it possible to find a solution that can bring an end to this nearly century-long conflict? For nearly as long as the strife between Israelis and Palestinians has persisted, peace advocates have debated the merits of a “one-state solution” vis-a-vi a “two-state solution.” The first proposal envisions a single state where Israelis and Palestinians coexist under a democratic political system that ensures equal rights for all. However, in practice, achieving this outcome would take generations. Given the urgency of the situation, such a solution is impractical in the current reality. The struggles that have classified the divide between Israelis and Palestinians will not cease within a unitary state. As Abraham Lincoln once said, a house divided against itself cannot stand; the resulting country would eventually become subsumed by one demographic group, and ethnic cleansing or apartheid would ensue.

For this reason, decades-old consensus within the international community holds that the two-state solution is the only realistic path toward peace, despite the various obstacles to its success. Officially, the United States supports a two-state solution, as do all of Washington’s Western and Arab partners. The Palestinian Liberation Organization (PLO) endorsed the concept in 1988, and even Hamas  declared that it could accept a two-state solution in 2006—though the militant group’s 2017 charter explicitly rejected the idea. For its part, Israel’s current government under Netanyahu has remained implacably opposed to the existence of a Palestinian state in any form. Without American pressure on Tel Aviv to make the concessions necessary to bring about a two-state solution, the issue will continue to languish.

Overcoming Israeli Obstinacy

As the bloodshed in Rafah and other parts of Gaza worsens with each passing day, the Biden administration continues to supply the IDF with billions of dollars’ worth of weapons for use in the conflict and defend Israel’s actions on the world stage. The reasons for Biden’s reluctance to change tack are clear. The presidential race between Biden and former president Trump is extremely narrow ahead of the November election, and public sentiment in the United States largely favors Israel. Wealthy Democratic donors with pro-Israel sensibilities provide an additional reason to refrain from pressuring Netanyahu’s government, conditioning aid to Tel Aviv, or drawing “red lines” around Israeli conduct. Although Netanyahu’s government rejects the two-state solution, the Biden administration has attempted to keep the idea alive—and suggesting that other benefits, such as normalization with Saudi Arabia, might follow if Tel Aviv accepts it.

Earlier this year, U.S. National Security Advisor Jake Sullivan gave outside observers the clearest look at Biden’s post-conflict Palestine proposal at the World Economic Forum in Davos, Switzerland. Sullivan broadly described four guiding principles for the region’s future: a state for the Palestinians, security for Israel, normalization between Israel and the Arab world (particularly Saudi Arabia), and the demilitarization of Gaza.

But while the White House and the Gulf Cooperation Council (GCC) member states are pushing for such a future—and Hamas has been devastated by the ongoing conflict—the clearest obstacles to long-term peace remains the Israeli government. Filled with extremists who use genocidal language and oppose any humanitarian initiatives toward Palestinian civilians, it is beyond doubtful that officials in Tel Aviv would even consider accepting a two-state solution. Absent Israeli willingness to entertain compromise, the Gulf states have little reason to offer anything to sweeten the deal. This would make the Biden administration’s task of convincing the Gulf states to join future economic or political initiatives immensely more difficult.

The UN has estimated the cost of reconstructing Gaza at about $40 billion. It has also suggested that recovery from the extensive and unprecedented destruction could take as long as 80 years—longer than the entire post-1948 period of Palestinian history. In order to begin such a daunting recovery, the funds of wealthy GCC donors are needed; but the bloc’s members have already affirmed they will not participate in covering the reconstruction costs of Gaza without certain guarantees from Israel. The Arab “quintet,” comprising Saudi Arabia, the UAE, Qatar, Jordan, and Egypt, has made it clear that its financial support for post-conflict Gaza will come at a price. The UAE’s permanent representative to the United Nations, Lana Nusseibeh, acidly observed that Abu Dhabi would not pay for new buildings in Gaza only to see them destroyed again in a future Israeli invasion.

Instead of simply pouring money into Gaza, the GCC states have emphasized the need to resolve the root causes of the conflict between Israel and the Palestinians—the occupation of Palestinian land and broader displacement, discrimination, and dehumanization of the Palestinian people. Gulf Arab leaders insist that without addressing these fundamental drivers of violence, no serious political solution can be on the horizon—and Israeli leaders will be left responsible for reconstruction.

In the face of Israeli intransigence and American ineffectiveness, the GCC states must test whether they have the political clout to revive the seemingly-moribund two-state solution. What is clear, though, is that Qatar, Saudi Arabia, and the UAE have emerged as increasingly influential Arab power brokers with increasingly aligned foreign policies on this issue. It is certainly worth considering the actions that these three GCC members could take to pressure Israel into agreeing to concessions to the Palestinians in exchange for financial assistance post-conflict or even diplomatic normalization. Of course, the Gulf states can only do so much to persuade Israel to accept the two-state solution—that decision will be made by the Israeli government. But for the good of the region, for Israel security and the Palestinian people, the quintet must pull every lever of power to cajole and coax Tel Aviv to compromise.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.

The UAE’s Complicated Taliban Outreach

On June 4, Taliban Interior Minister Sirajuddin Haqqani traveled to Abu Dhabi and met with the United Arab Emirates (UAE) President Sheikh Mohammed bin Zayed (MbZ). The occasion marked Haqqani’s first trip outside Afghanistan since the Taliban retook control of the country in August 2021. Abdul Haq Wasiq, the Taliban’s spy chief, also joined the delegation. According to Emirati state-run media, the two sides discussed “strengthening the bonds of cooperation between the two countries and ways to enhance ties to serve mutual interests and contribute to regional stability.” Sources also noted that the leaders had focused on “economic and development fields, as well as support for reconstruction and development in Afghanistan.”

Haqqani’s visit to Abu Dhabi sent shockwaves through the United States, as the Taliban interior minister is still wanted by the American government for his role in a terror attack in Kabul that killed one American civilian in Kabul along with attacks on U.S. and coalition forces in Afghanistan. Wasiq was the Taliban’s Deputy Minister of Intelligence, until that government fell in 2001, before he was captured by the United States in 2002 and held in the Guantanamo Bay detention camp until his release in 2014 as part of the Bowe Bergdahl prisoner exchange. MbZ’s willingness to meet with them openly—treating them as accredited representatives of a foreign government, rather than as militants with American blood on their hands—unquestionably caused consternation in Washington.

Given Abu Dhabi’s systemic engagement with the Taliban since its return to power almost three years ago, however, MbZ’s hosting of Haqqani should come as no surprise. In fact, since their reconquest of Afghanistan, Taliban officials have paid repeated visits to the UAE both covertly and overtly—including a meeting between MbZ and acting defense minister Mullah Yaqoob in Abu Dhabi in late 2022.

Strange Bedfellows

The UAE, which is home to a large Afghan diaspora population, has a decades-long history of maintaining either formal or informal relations with the Taliban. When the so-called “Islamic Emirate of Afghanistan” controlled the country from 1996 until 2001, the UAE, Saudi Arabia, and Pakistan were the only three states in the world that extended formal diplomatic recognition. Beginning in the 1980s, during the Soviet Union’s ill-fated war in Afghanistan, the Haqqani network set up front companies in the UAE to launder money through Emirati banks. This practice continued for decades, even after the Obama administration pressured the UAE in 2014 to shut down such operations.

During the Trump presidency, the UAE’s policy toward the Taliban insurgency appeared somewhat contradictory. Abu Dhabi was a venue for negotiations between the United States and the Taliban, culminating in a landmark meeting between American, Emirati, Saudi, Pakistani, and Taliban officials in 2018. Only one month later, however, Emirati officials reportedly offered then-Secretary of State Mike Pompeo Emirati assistance in standing up a covert program designed to eliminate Taliban leaders throughout Afghanistan.

Today, the UAE enjoys a pragmatic and constructive, even if unofficial, relationship with the Taliban. Abu Dhabi has come to terms with the reality of Taliban rule in Afghanistan and is simply trying to make the most out of the situation. Indeed, it would appear that the UAE has traded ideological fervor for political opportunism. In the post-2021 period, Abu Dhabi’s Afghanistan policy has exhibited impressive agility. Similar to seismic shifts in Abu Dhabi’s relationships with Qatar, Israel, and Syria over the past half-decade, the UAE is adept at quickly altering its stance toward different regional actors in the region in response to changes in international circumstances.

The UAE, along with Qatar, has sought to establish itself as one of the most influential outside actors in post-U.S. Afghanistan. In May 2022, GAAC Solutions, a major Emirati airline services firm, signed a deal with the Taliban to manage its airports in Herat, Kabul, and Kandahar, while FlyDubai (an Emirati government-owned low-cost airline) has been flying into the international airport in Kabul, underscoring the UAE’s important role in connecting landlocked Afghanistan to the outside world. The UAE has also played an important role in helping the Afghans face their country’s humanitarian crises. One month after the Taliban retook control of Afghanistan, the UAE started operating an air bridge to deliver badly needed medical and food aid to the war-torn country.

What Each Side Gets

The UAE’s interest in a stable and friendly Afghanistan dovetails with its desire to reduce the threat posed by the Islamic State— Khorasan Province, or ISIS-K. While the group has primarily targeted Iran, Russia, the Central Asian republics, and Turkey rather than the Gulf Cooperation Council (GCC) states, it remains an avowed enemy of the rich Arab monarchies and appears to be growing in strength—as illustrated by recent high-profile terrorist attacks in Kerman and Moscow that killed hundreds of civilians. Consequently, nearly all West Asian governments share serious concerns about ISIS-K and its machinations.  The Taliban is not only Afghanistan’s de facto government, but also a sworn enemy of ISIS-K. Therefore, Abu Dhabi’s counter-terrorism interests in Afghanistan necessitate a security relationship with those in power in Kabul.

For the Taliban, closer ties with the UAE are a clear priority. The ability of high-ranking Afghan officials to travel to Abu Dhabi and be welcomed by MbZ, a prominent regional leader with significant clout in the West, serves to legitimize the government on a global level. The Taliban’s low-level engagement with other GCC states, China, Iran, and Russia also plays into this effort to make the newfangled Islamic Emirate of Afghanistan appear less isolated.

Finally, although officials in the United States were unpleased to see Haqqani as a guest in Abu Dhabi, it is doubtful that Washington will take any harsh measures in response to his visit. The United States’ policy on Afghanistan has largely remained adrift since 2021, with the Biden administration unwilling to recognize or engage with the Taliban but also unwilling to seriously contest its control over the country. As the UAE is a close U.S. partner and the Arab pioneer of the Abraham Accords, it would be difficult to imagine Washington taking any sort of retaliation against Abu Dhabi for its engagement with the Taliban. Moreover, in time, the United States might come to see the UAE’s dialogue with the Taliban as potentially serving Washington’s interests, given Abu Dhabi’s potential to relay messages to the Islamist rulers in Kabul on behalf of Western governments. Ultimately, just as Qatar proved to be an important diplomatic bridge to the Islamic Emirate, the UAE is well-positioned to play a similar role as an interlocutor in the years ahead.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.

Obstacles to Unleashing the Gulf’s Entrepreneurial Potential

The Gulf Cooperation Council (GCC) countries have long striven to become less dependent on oil revenue and, in the process, make their citizenry less dependent on the public sector for employment. To this end, policymakers across the Gulf’s Arab monarchies plan to transform their citizens into entrepreneurs and their states into start-up nations, realizing a knowledge economy no longer dependent on oil rents to generate GDP or government revenue.

To achieve this goal, the GCC states have set out to encourage venture capital, founding incubators and accelerators, and build a more competitive higher education system, with assistance from Western universities. They have also established special economic zones with no- or low-tax regimes, developed local capital markets, and host high-profile business-focused events like Dubai’s Expo 2020 and Riyadh Expo 2030. Taken together, these efforts have begun to bear fruit, with celebrated start-up unicorns like Careem and Tabby reshaping entire industries across the Gulf. Despite early successes, the long-term viability of innovation and entrepreneurship in the Gulf remains in doubt. Whether start-ups can eventually replace the highly profitable fossil fuel industry will depend on the policy decisions made by today’s leaders.

The Long and Winding Road to Start-Up Nation

The global competition for entrepreneurship, venture capitalism, and successful start-ups is fierce. Two crucial local advantages that make start-up hubs in the United States, Europe, China, and, increasingly, India so successful are their existing agglomeration economies. Start-ups thrive where a start-up community already exists. In countries that lack such an entrepreneurial ecosystem, new businesses struggle to get off the ground. Further, start-ups flourish in the presence of top universities, which provide the fundamental education and research required to begin innovative businesses. While GCC countries (notably the UAE, Saudi Arabia, and Qatar) are catching up in these domains, they continue to search for unique competitive advantages that will set the region apart, as well as new markets into which Gulf companies can expand.

Unfortunately, in addition to global competition, intense rivalry within the GCC itself may stymie growth. Instead of cooperating and coordinating their economic policies, member states are engaged in a potentially ruinous “rat race” with one another. Within the wider region, start-up giant Israel may prove to be more of a rival than a partner, as economic pressures will lead it to invest in its own companies’ products and services. Regional joint ventures, especially in security-sensitive areas, may prove infeasible. Thus, the GCC states may need to look at internal coordination and cooperation if they want to develop a strong start-up culture.

Gaps in the Innovation Ecosystem

The university system’s two main functions are to produce innovations and develop human capital. Most research-intensive start-ups begin as spin-offs from leading research universities, such as Silicon Valley’s Stanford and UC Berkeley or the robotics champion Carnegie Mellon in Pittsburgh. These ventures use both the intellectual property developed and the skilled workforce educated at these institutions to great success. Examples include Google, which grew out of founders Larry Page and Sergey Brin’s PhD work at Stanford University and Pfizer’s blockbuster COVID-19 vaccine, which was developed by the German university spin-off BioNTech.

Policymakers in the Gulf seek to replicate these successes at home. There have been some initiatives to establish home-grown world-class university research in the GCC, such as the King Abdullah University of Science and Technology (KAUST) in Saudi Arabia and the Doha Institute in Qatar, which concentrate on doctoral and post-doctoral education and research. However, these efforts have so far not yielded the hoped-for breakthroughs, as lackluster patent numbers, scientific citations, and global academic rankings show. As a result, there is an innovation gap in the pipeline for start-ups in highly profitable but R&D-intensive sectors like pharmaceuticals and IT.

This gap between aspirations and reality has widened because the GCC states have not focused enough on developing university research. Although the region frequently spawns higher-education initiatives, these tend to remain isolated and short-lived. What is needed instead is a long-term, well-funded, nationally coordinated strategy for research and development. Countries such as the United States, Germany, and Switzerland show that national science foundations are crucial for the success of such a strategy. Qatar appears to have learned this lesson; it has been attempting to compensate for its small size and population with a centralized research coordination strategy through the Qatar Foundation, flanked by commensurate funding and specialized National Research Institutes.

The second main hurdle is scale. Like start-ups, research ecosystems exhibit a strong tendency toward agglomeration: the more high-quality research in one location, the more top researchers it will attract, and so on. As long as the critical mass of top-level research institutions is lacking, the GCC region will remain to be seen as a backwater for world-class researchers. Saudi Arabia has advanced the furthest in correcting this perception by leveraging both its large, well-educated population and several established research universities that have steadily increased their scientific output, climbing the rankings in the process. But a world-class R&D cluster in the Gulf remains far off, especially in the absence of GCC-wide research cooperation and coordination efforts.

Lack of Holistic Policy Planning and Evaluation

The obstacles to fostering a competitive R&D ecosystem in the Gulf are part of a larger policy issue. Although the Gulf countries’ proliferatingVisions” suggest an overarching strategy, suboptimal policy planning, coordination, and evaluation often hampers implementation. Many initiatives lack the three necessary ingredients for success: thorough due diligence during planning, close monitoring throughout their active phase, and systematic follow-up after completion. As a result, individual policy projects tend to remain unconnected and follow “hype cycles” that leave a trail of abandoned, half-completed pet projects in their wake.

The most prominent examples of these are the region’s half-finished megaprojects—such as the King Abdullah Economic City in Saudi Arabia and various Hyperloop plans involving several regional states that have never come to fruition—but also targeted industrial policies, like the Metaverse and FTX debacles. The latter left a trail of hagiographic advertisements billing the company as the future of commerce for weeks after its demise. These failures tend to follow the same pattern and could often be avoided with more professional and systematic policy planning and evaluation.

Finally, to the extent that start-ups feature in government planning, these are rarely “native.” For example, Volocopter, the company behind Dubai’s planned (but as yet undelivered) drone taxis, is a German start-up. Local start-ups also face headwinds when it comes to raising capital. GCC countries’ attempts to privatize public utility “whales” have crowded out smaller IPOs from capital markets—exemplified by the dominance of Aramco in Saudi Arabia and the Dubai Electricity and Water Authority and toll road operator Salik in the UAE. Because the region’s stock markets remain dominated by these conventional heavyweights, they have so far failed to develop the depth and liquidity to serve the capital needs of small and medium enterprises (SMEs), and of innovative start-ups in particular.

The journey from petrostates to start-up nations for the GCC holds immense potential but is also fraught with challenges. While high-profile projects and global events bring visibility, the actual transformation hinges on nurturing local capacity, fostering an entrepreneurial ecosystem, and investing in research and development. The GCC countries must overcome internal competition, develop comprehensive and coordinated policies, and focus on sustainable, long-term strategies to build a robust SME sector. By learning from successful global models and tailoring strategies to their unique contexts, the Gulf states can achieve a diversified and resilient economy. The future of innovation and entrepreneurship in the GCC will ultimately depend on the policy decisions and commitments made today, steering the region towards a knowledge-based economy that can thrive beyond its reliance on fossil fuels.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.

Sixth Panel at the Fifth Annual Gulf International Conference “Soft Power in the GCC: Sports Diplomacy, Mediation, and Cultural Industries”

Sixth panel at the Fifth Annual Gulf International Conference hosted on November 16, 2023 at the National Press Club between 3:20 PM ET – 04:30 PM ET. Panel title “Soft Power in the GCC: Sports Diplomacy, Mediation, and Cultural Industries.”

Speakers:

Khalid Saffuri (moderator), Founder and President of the National Interest Foundation

Dr. Courtney Freer, Provost’s Postdoctoral Fellow, Emory University; Senior Non-Resident Fellow, Gulf International Forum

Dr. Khalifa Al Suwaidi, Research Fellow, Anwar Gargash Diplomatic Academy

Fatima Al-Dosari, Executive Director, Qatar America Institute for Culture

Fifth Panel at the Fifth Annual Gulf International Conference “The Gulf’s Ambitious Climate Action: Renewables, Green Policies, and Emission Reduction”

Fifth panel at the Fifth Annual Gulf International Conference hosted on November 16, 2023 at the National Press Club between 3:20 PM ET – 04:30 PM ET. Panel title “The Gulf’s Ambitious Climate Action: Renewables, Green Policies, and Emission Reduction.”

Speakers:

Dr. Wafa Al-Daily (moderator), Board Member, Gulf International Forum

Princess Noura Bint Turki Al Saud, Founding Partner, AEON strategy

Ben Cahill, Senior Fellow, Center for Strategic and International Studies

Dr. Sara Vakhshouri, Adjunct Professor of Energy Security and Director of the Center for Energy Security and Diplomacy, The International Institute of World Politics; Founder and President, SVB Energy International

Dr. Gawdat Bahgat, Professor of National Security Affairs, National Defense University’s Near East South Asia Center for Strategic Study; Senior Non-Resident Fellow, Gulf International Forum

Fourth Panel at the Fifth Annual Gulf International Conference “The Future of Knowledge Production in the Gulf: Media, Social Media and Artificial Intelligence”

Fourth panel at the Fifth Annual Gulf International Conference hosted on November 16, 2023 at the National Press Club between 2:00 PM ET – 03:10 PM ET. Panel title “The Future of Knowledge Production in the Gulf: Media, Social Media and Artificial Intelligence”

Speakers:

Zaid Benjamin, Journalist and Blogger (moderator)

Dr. Khalid Aljaber, Director, MENA Center

Dr. Mohammad Alrumaihi, Professor of Sociology, Kuwait University; Board of Directors Member, Gulf International Forum

Joyce Karam, Senior News Editor, Al-Monitor

Abderrahim Foukara, Bureau Chief for the Americas, Aljazeera

Third Panel at the Fifth Annual Gulf International Conference “Creative Insecurity: Disruptive Technologies and Youth Potential in the Gulf”

Third panel at the Fifth Annual Gulf International Conference hosted on November 16, 2023 at the National Press Club between 2:00 PM ET – 03:10 PM ET. Panel title “Creative Insecurity: Disruptive Technologies and Youth Potential in the Gulf”

Speakers:

Dr. Amin Mohseni-Cheraghlou (moderator), macroeconomist at the GeoEconomics Center, the Atlantic Council; Assistant Professor of Economics, American University in Washington, DC; Non-Resident Fellow, Gulf International Forum

Dr. Dania Thafer, Executive Director and Senior Fellow, Gulf International Forum

Dr. Racha Helwa, Director of the empowerME Initiative, the Atlantic Council’s Rafik Hariri Center for the Middle East

Dr. Kristian Coates Ulrichsen, Fellow for the Middle East, the Baker Institute; Senior Non-Resident Fellow, Gulf International Forum

Dr. Ghiyath Nakshbendi, Senior Professorial Lecturer, American University Washington, DC

Second Panel at the Fifth Annual Gulf International Conference “Reconciliation and Rivalry: the Role of Turkey, Iran and Israel in the Gulf”

Second panel at the Fifth Annual Gulf International Conference hosted on November 16, 2023 at the National Press Club between 10:55 AM ET – 12:05 PM ET. Panel title “Reconciliation and Rivalry: the Role of Turkey, Iran and Israel in the Gulf.”

(This panel is organized in partnership with Middle East Council on Global Affairs)

Speakers:

Ambassador Patrick N. Theros (moderator), Strategic Advisor and Senior Scholar, Gulf International Forum

Jonathan Lord, Senior Fellow and Director of the Middle East Security program, Center for New American Security

Dr. Roxane Farmanfarmaian, Director of International Studies and Global Politics, the University of Cambridge Institute for Continuing Education

Dr. Abdulla Baabood, Member of the Board of Directors, Gulf International Forum; Chair of the State of Qatar for Islamic Area Studies and a visiting professor at the Faculty of International Research and Education, Waseda University, Tokyo-Japan

Omar H. Rahman, Fellow, the Middle East Council on Global Affairs; Nonresident Fellow, the Baker Institute for Public Policy

First Panel at the Fifth Annual Gulf International Conference “Great Power Competition and America’s Standing in the Gulf”

First panel at the Fifth Annual Gulf International Conference hosted on November 16, 2023 at the National Press Club between 9:35 AM ET – 10:45 AM ET. Panel title is “Great Power Competition and America’s Standing in the Gulf,” and speakers are:

Speakers:

Dr. Kristian Coates Ulrichsen (moderator), Fellow for the Middle East, the Baker Institute; Senior Non-Resident Fellow, Gulf International Forum

Shaikh Nawaf Al Thani, Qatar’s former Defense Attache to the United States, Canada and Mexico; Member of the Board of Directors, Gulf International Forum

Dr. Paul Salem, President and CEO, Middle East Institute

Shaikha Najla Alqasimi, Director of Global Affairs Department, Bhuth

Dr. Abdulaziz Alsager, Chairman and Founder, Gulf Research Center

Between Mediators and Stakeholders: Gulf States’ Role in the Israel-Gaza Crisis

On October 26, 2023, Gulf International Forum hosted a panel titled “Between Mediators and Stakeholders: Gulf States’ Role in the Israel-Gaza Crisis.”

Featured speakers: Ambassador Patrick Theros, Dr. Randa Slim, Dr. Aziz Alghashian, Dr. David Pollock and Khalil Shahshan

Normalization at What Cost? The Risk of Pushing Amid the Gaza War

As Israel’s war on Gaza approaches its ninth month and its aggressive tactics have come under global scrutiny, the United States continues its mission to pressure Saudi Arabia and other Arab states to normalize relations with Israel. This approach not only seems increasingly irrational but also risks inflaming tensions between Arab leaders and their people, jeopardizing relations between the United States and the Arab world. Outrage over the subservience of Arab leaders to American demands and President Biden’s near-unconditional support for Israel has reached a boiling point. Daily footage of the death and destruction wrought in Gaza exacerbates this anger, turning living rooms across the Middle East into fertile ground for hostility and even extremism.

By pushing for normalization under such direly abnormal circumstances, Washington risks fostering deep-seated animosity among Arabs across the region and prolonging the collective suffering of millions. The Biden administration should thus reconsider its intensive normalization efforts and take a step back to evaluate the long-term consequences of its broader regional approach. Otherwise, besides complicated diplomatic and strategic initiatives, the prospects of Palestinian self-determination in the future may be further marginalized, creating severe antagonism towards the US and its institutions throughout the Arab world. Hence, for the sake of securing peace and stability, a more balanced and empathetic approach to the region is imperative.

Cracking Down on the Traumatized

It is difficult to overestimate the psychological toll that the jarring images of the war have had on Arab audiences for the last eight months. Coverage of the Gaza war has dominated Arab news since October 7, and social media has given global audiences a brutally unfiltered view of the suffering and devastation it has caused. Some psychologists have warned about the impacts of constant exposure to these images on mental health, noting they can trigger the body’s flight-or-fight response and bring about depression. According to U.S. Army Col. Steven Sugden, MD, “Civilians, soldiers, and those consuming the war through social media can develop the typical psychological profile of trauma. Consumers of a war via television, social media, or other forms of media can be just as impacted as the actual individuals within the conflict.”

This widespread psychological impact is compounded by state repression across the Arab world in response to protests in support of the Palestinian cause. Various countries have responded to public demonstrations against the war with varying levels of severity including arrest. In Jordan, protesters have been dispersed by police forces and hundreds have been detained. In Egypt, during a demonstration criticizing President Abdel Fattah El-Sisi’s collaboration in the ongoing blockade of Gaza, several young men were arrested and later charged with terrorism and disseminating misinformation. While the use of violent tactics to suppress and deter mass protests is not surprising, the intensity of the uproar and anger expressed in these demonstrations reveal the profound disdain at the grassroots level for their governments’ response—or lack thereof—to the bombardment of Gaza.

A Festering Wound

Arab resentment towards Israeli policies was not born in the aftermath of October 7. These tensions have deep historical and intergenerational roots, and Arab animus against Israeli policies invariably intensifies when Palestinian civilians suffer at the hands of the Israel Defense Forces. Though many Arab governments fanned anti-Israel sentiment in the past in order to bolster domestic support and distract from problems at home, they may have come to regret these policies. Indeed, the Palestinian cause has often created a deep rift between the people and their governments across the Arab world, highlighting how the popular support for the Palestinian cause has clashed with leaders’ prioritization of their national and foreign policy interests.

Unsurprisingly, due to U.S. ironclad support of Israel, pro-Palestine demonstrations in the Arab world have usually included anti-American elements. For example, while the 1977 bread riots in Egypt were primarily driven by economic grievances, the rioters also expressed a collective dissatisfaction with then-President Anwar Sadat’s decision to align Egypt with the United States. His signing of the U.S.-brokered Camp David Accords in 1978 was similarly controversial, and later led to his assassination. In the 2008-09 Gaza War, American embassies across the Middle East were inundated with demonstrations protesting Washington’s unwavering support of Israel and its role in the Gaza humanitarian crisis. The same influence may be seen in today’s protests.

Many Arab citizens have long held the view that their leaders prioritize good relations with the United States over the Palestinian issue, and these governments have given their people little reason to change this view over the past months. Across the region, populations who feel that their voices have been ignored are expressing their profound distaste for government policy toward Israel and the United States. In a recent survey conducted in 16 Arab countries, more than three-quarters of the respondents reported that their attitude toward the United States had become more negative since the Gaza conflict began. Additionally, more than half reported a view that U.S. foreign policy posed the gravest threat to the region—followed by Israel at 26 percent. The numbers underscore how U.S. diplomacy designed to appeal to the Arab masses lacks a solid foundation.

Of course, Washington’s overtures are easily undermined by its policies regarding Israel. Given that the vast majority of the Arab population is staunchly pro-Palestine, a prolonged military campaign that kills over 34,000 Palestinians—mainly civilians, women and children—is naturally perceived as an attack on the entire Arab world. This perspective, too, is substantiated by survey results. 92 percent of respondents in the same survey said they viewed the Palestinian cause as an Arab one, inseparable from the broader Israel-Arab context and reflective of the Middle East’s colonial past. This represents a significant increase from just two years ago, when only 76 percent of respondents saw the conflict in the same light. Despite overwhelming support for Palestine and the Palestinians among ordinary Arabs, the region’s U.S.-friendly governments have generally not broken ties with Tel Aviv, and none of the nations that extended recognition to the Jewish state in the 2020 “Abraham Accords”—ironically claiming at the time that doing so would help them to act in the Palestinians’ best interests—have rescinded it.

This disconnect has generated a collective sense of injustice among disgruntled Arabs, raising concerns about potential radicalization. However, these concerns are not limited to mobilization by pre-existing extremist groups. Grassroots youth mobilization has emerged even in staunchly pro-U.S. states, revealing the precarity of the Abraham Accords. In the Gulf, Dr. Mira Al Hussein points out that the ongoing war in Gaza could intensify grievances among the youth. “What Gulf regimes ought to pay attention to,” she says, “is the mass appeal of the Palestinian resistance that is delivered through a familiar religious lexicon… The young Gulf citizen, hyped-up by state discourse about masculinity and military prowess, is hypnotized by videos of Hamas combatants dealing heavy blows against Israeli forces.” For all the efforts of Gulf diplomats and ruling families, Dr. Hussein argues, the Abraham Accords are doomed to fail in the long run if the next generation cannot be persuaded of the benefits of closer relations with Israel.

For this reason, it is crucial to take a step back and evaluate the consequences of rushing normalization when the vast majority of the population opposes it. The tensions between regional governments and their citizens largely stem from a clash of perceptions about Israel. While political elites may see normalization as a pathway to improving their national interests—boosting regional security, deterring Iran, facilitating technology transfers, and promoting economic diversification—the people will only view Israel as an aggressor against the Palestinians’ right to self-determination and a threat to regional stability as long as Palestinian aspirations for a free and independent state remain unanswered. Therefore, pursuing a more balanced approach that seriously considers the reality on the ground, as well as the alleviation of the Palestinian plight, is essential. Prudence and patience, even if it postpones diplomatic normalization by several years, will prove a more sustainable strategy—and it will better serve the interests of the United States, Israel, and the Arab world in the long run.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.

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