Some of Wall Street’s top CEOs have spent the past week on diplomatic missions in Saudi Arabia. It wasn’t presented as diplomacy, of course. The financiers who participated in Saudi Arabia’s Future Investment Initiative, known as “Davos in the Desert,” are a well-scripted group who prefer to keep their dealings private as much as possible.
Bad luck. Rumor has escaped me that what happened was far more important than climate change seminars or whatever else the globalist crowd likes to point out virtue on.
On the contrary, people familiar with the matter tell me that the real reason so many top CEOs attended the conference was to forge a truce between the Saudis and the Biden administration. The continued and very public warmongering between the two longtime allies is bad for business, both for the CEOs and for the United States.
To be sure, Saudi Arabia is a big client of Wall Street seeking to further modernize its economy through investment banking operations, while it looks to our financial sector to manage its wealth. But the growing consensus among those running the US financial system is that having the Saudis as an enemy is one of the biggest geopolitical and economic mistakes of the error-prone Biden administration.
This will embolden the goals of our common enemy, the terrorist regime in Iran, and drive the Kingdom further into the hands of our rivals, Russia and especially China. (Representatives from China flooded the conference this year, I’m told, and not because they like the desert heat). Moreover, bickering will do nothing to satisfy our energy needs and save Sleepy Joe Biden’s presidency.
To those unfamiliar, what happens in Riyadh every year for nearly a decade sounds a lot like the more established World Economic Forum conference in Davos, Switzerland. Running the show in Riyadh is a more controversial host than the WEF’s milquetoast globalist leader Klaus Schwab.
This is the Crown Prince, Mohammed bin Salman, known to enemies and admirers as MBS. When MBS (who is only 37) became the de facto ruler of the kingdom a few years ago, he was leading a country with enormous oil wealth and vast economic potential.
He was also responsible for maintaining the somewhat uncomfortable relationship with us due to his country’s often deplorable human rights record. It was hoped that the young new leader would enact reforms, dampen the Kingdom’s anti-democratic impulse and modernize its economy away from its reliance on crude.
Let’s just say it didn’t happen exactly that way. The Crown Prince instituted much-needed changes, such as expanding women’s rights. The Kingdom’s giant oil company, Saudi Aramco, is venturing beyond fuel into areas such as technology. The Saudis have continued to support Israel’s existence, albeit tacitly, and remain an enemy of Iran.
MBS also put a slew of people he considered potential rivals under house arrest immediately after taking control. Then-presidential candidate Biden campaigned in 2020 to make Saudi Arabia a ‘pariah’ nation because the Kingdom has not abandoned its autocratic leanings and because MBS is widely blamed for the assassination of a journalist critical of his regime, Jamal Khashoggi.
More recently, tensions went from bad to worse after our weak leader sought to cut domestic oil production, visited the Middle East and begged the crown prince to increase supply. Biden thought he had a deal until MBS and OPEC announced cuts, prompting the administration to threaten sanctions and possibly more.
OK, I know what you’re saying: that MBS is a bad guy. Wall Street only loves him for his money, his control over Saudi Aramco and the huge state pension fund. Both are increasingly generating investment banking and fund management fees for companies like Goldman Sachs, JPMorgan, BlackRock, and more. – the same type of people who tell the White House to back down.
Point taken, but the big cats who have been to Riyadh (Jamie Dimon of JP, David Solomon of Goldman, reps from major private equity and fund management firms) also say the world is full of bad actors. The Saudis are probably the best – and most strategically important – of the bunch.
It’s a geopolitical reality that the Trump administration and past presidents have accepted, but the progressive bigots currently in charge of the Biden team won’t.
It is also reckless. Biden’s scorched-earth approach to MBS harms the American consumer and the nation’s national security interests, and Wall Street leaders are pointing out to me and their White House contacts, that our time would be better spent completing pipelines if we really want to reduce the cost of fuel here at home.
On top of all that, the recent row over oil production may not be the one-sided affair the White House and the Dems are claiming. In private meetings with CEOs, the Saudis argue that the oil production cut was well telegraphed, no matter what Biden may have thought after his infamous punchline with MBS in July.
“No choice” on supply
OPEC’s decision is based on a long-standing desire to keep prices from falling below $80-90 a barrel. Because Biden continues to release oil from the Strategic Petroleum Reserve and the global economy falls into recession, the Saudis say they had no choice but to cut off the supply.
If the White House didn’t know, Sleepy Joe must have been half asleep during those talks, the Saudis say.
These are all points raised by senior Wall Street executives to members of the Biden administration in recent days, I am told. Wall Streeters understand that MBS is no saint, but Sleepy Joe’s weak hand makes the crown prince a necessary evil. Biden should take their advice and focus on real enemies.