Saudi Arabia Seeks Sympathy in the United States at ‘Davos in the Desert’

RIYADH — Ever since Saudi Arabia and Russia agreed to cut oil production this month, President Biden and other American officials have been in an uproar. But among the American business leaders attending the kingdom’s annual investment conference this week, there was plenty to agree with Saudi Arabia’s views.

The OPEC Plus group’s October 5 decision to sharply reduce output initially sent energy prices higher, and the Biden administration accused the Saudi leadership of siding with Russia, which has benefited from the cuts. reduced – in the war with Ukraine. The Saudi government has publicly supported it, saying it is trying to keep prices steady amid fears of a looming global recession and stockpiling for an uncertain winter to There is no shortage of supply.

John Quinn, president of Los Angeles-based law firm Quinn Emanuel Urquhart & Sullivan, said in an interview at a conference in the Saudi capital, Riyadh: “The Saudis understand the oil market. mines than anyone else in the world. “I think you have to take them seriously in terms of value when they say we feel demand is down, we need a stable market.”

Mr. Quinn went on to say that his country’s position doesn’t make much sense: “What’s the US argument? We asked you to do it and you didn’t do it? “

Corporate attitudes towards Saudi Arabia are linked to self-interest: The conference, nicknamed Davos in the Desert, is where thousands of entrepreneurs gather annually to shake hands with powerful investors. of Saudi Arabia in the hope of securing start-up capital, mentoring or new jobs.

The world’s largest crude oil exporter, Saudi Arabia, is running out of cash, and many are willing to turn a blind eye to its less palatable face, even if that involves friendly foreign alliances with people like Russian President Putin often violate human rights.

During three days of meeting and making the deal, overshadowed by the breakdown in the usual cordial relationship between the United States and Saudi Arabia, the guests ate oregano-flavored popcorn snacks, and soaked their feet. on artificial turf, talked about the energy crisis, and pushed Saudi-funded megaprojects like the construction of a 100-mile linear city in the desert.

Mr. Quinn, like many executives at the conference, does business with Saudi Arabia. His company represents professional golfers who play for the Saudi-backed LIV Golf in an antitrust lawsuit they filed against the PGA Tour.

He and other business leaders have worked to defend the kingdom, criticizing US officials or both. Some echoed the rationale for preserving production capacity given by the Saudi Energy Minister.

Others say the kingdom is unlikely to benefit the US after being repeatedly beaten by Mr Biden, who has called Saudi Arabia, who has called Saudi Arabia, a “bad guy” during the campaign running for office in 2019 and threatened to deal with the “consequences” of this month’s manufacturing operations. cut.

When asked last week if American companies doing business in Saudi Arabia were a good fit, White House Press Secretary Karine Jean-Pierre noted the reputational risk of investing in foreign countries. have poor policy choices.

But the conference crowd’s skepticism of Mr. Biden’s hardline stance on the kingdom underscores the extent to which, according to some American executives, his administration has strayed from the realism of the relationship. U.S.-Saudi Arabia relations, which happen every day in the business world.

Former President Donald J. Trump is often criticized for his approach to dealing with foreign allies. But his philosophy is in line with that of Saudi Arabia’s de facto leader, Crown Prince Mohammed bin Salman, who announced an ambitious economic diversification plan based on investment partnerships. internationally a year before Mr. Trump took office.

Now, that bilateral relationship is much defined by executives like Jamie Dimon, the JPMorgan Chase chief executive, and Steven Mnuchin, the former Treasury secretary who is now a private investor with an account $1 billion in funding from Saudi Arabia’s sovereign wealth fund – like the White House or State Department, which have not had an ambassador in Riyadh since Mr. Biden took office nearly two years ago.

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Helima Croft, an American commodities strategist at Canadian bank RBC Capital Markets, said she sees a difference between how people look at the market and Washington views the output cuts.

“I almost see two very different conversations,” she said.

Saudi Arabia’s annual conference, officially known as the Future Investment Initiative, has become a magnet for business leaders, drawing more than 5,000 attendees in the year alone. now. They have not been deterred by US intelligence assessments showing that Crown Prince Mohammed likely approved the 2018 murder of Saudi dissident journalist Jamal Khashoggi, or by controversies. Another controversy revolved around the country’s authoritarian leaders.

Despite the geopolitical tensions, a sense of crowding reigned at the gathering in a luxury hotel complex in Riyadh. Along the gilded corridors of the convention center, US executives mingle with crypto billionaires, California venture capitalists, Russian businesswomen, news reporters. the Chinese state and the royal family of Saudi Arabia.

Former US Energy Secretary Rick Perry, now a director of an American company working with Saudi Aramco, the national oil company, holds an Australian mining executive’s arm in the lunchroom.

Eric Cantor, former majority leader of the House of Representatives, chatted with his current boss, investment banker Ken Moelis, near a crowded coffee shop funded by the Public Equity Fund. Saudi Arabia’s sovereign property, oversees more than $600 billion and has invested abroad in companies like Uber. Mr. Moelis has done so much consulting work for the kingdom that it has been jokingly dubbed the “Ken of Arabia” by financial circles.

Onstage in discussions and off-stage, American executives raised concerns about American leadership. Mr. Dimon, whose company recently issued a Public Investment Fund bond offering, said that US officials need to stay out of “my rut or highway mentality” and “leadership”. American ugliness”.

Jeff Schachter, who runs a hedge fund in Lakewood, NJ and invests in the kingdom, calls the lack of US ambassadors to Saudi Arabia “one of the biggest signs of disrespect that Americans can be.” show”.

Trump’s son-in-law, Jared Kushner, who served as a senior adviser to the president on the Gulf region and now runs an investment firm with $2 billion in funding from the Public Investment Fund, was also among them. those who attended.

“You’re going to see over the next decade a lot of progress and growth coming from this part of the world,” he said from dais on Tuesday.

And as usual, there were deals done.

On Wednesday, Crown Prince Mohammed announced that Saudi Arabia’s sovereign wealth fund would establish five companies targeting investments of up to $24 billion in Bahrain, Iraq, Jordan, Oman and Sudan. The CEO of Saudi Aramco, the national oil company, says the company’s venture capital arm will launch a $1.5 billion fund that invests in problem-solving startups Climate Change.

To many, it seems like Saudi Arabia – now more than six years into the midst of a dizzying overhaul led by Crown Prince Mohammed to open up its economy, relax social restrictions and tighten repression. politics – are feeling increasingly encouraged.

“The overall message is, ‘Saudi Arabia first,’” said Kristin Diwan, senior resident scholar at the Academy of Arab Gulf States in Washington. “They feel confident,” she added.

“Saudi Arabia has changed profoundly over the past 10 years,” she said. “It’s between an assertive nationalist and their foreign policy reflects that.”

Like their American guests, Saudi officials and executives aren’t shy about criticizing Biden and his anger over oil production cuts. They argued that the White House’s assertion that it had promised to increase production before the president’s visit to Jeddah in July was false.

They say the US midterm elections on November 8, in which gas prices have become a sore point, make them feel like a scapegoat for Mr. Biden and the fracturing Democrats. your.

Sadad al-Husseini, a longtime oil employee and former chief executive officer at Saudi Aramco, said: “Put the finger and say that someone else did this and that the price of gasoline went up because of them.

Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, pointed out that after all, he and his superiors have one country to run – and it’s not the United States.

“I kept listening, ‘Are you with us or against us?'” Prince Abdulaziz said on stage on Tuesday. “Is there any room for ‘We are for Saudi Arabia and its people? Saudis?'”


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