By Noureddine Omar | 2024-02-16

The US-Saudi relationship is one of the strongest and most interdependent among the United States' allies in the Middle East, and is built foremost on a long history of economic partnership.

By overcoming periods of tension, the relationship has only grown sturdier and has proved it is built on a foundation of mutual respect and common interests.

"US-Saudi relations are the longest-standing relations the United States has in the Middle East, dating back more than 80 years," said Faisal al-Khawaldi, a lecturer at the faculty of economics and administration at King Abdulaziz University in Jeddah.

Since the two countries established full diplomatic relations in 1940, the relationship has taken an important and strategic direction, beginning with the exploration of oil, which became the primary pillar of the Saudi treasury, he said.

Economic cooperation between the two is the strongest part of the relationship, he said, adding that "the United States is the Kingdom's fourth biggest trading partner and the second biggest in terms of value of imports."

US trade in good and services with Saudi Arabia totaled an estimated $46.6 billion in 2022, according to the Office of the US Trade Representative.

US exports to Saudi Arabia have increased at an annualized rate of 2.55%, from $6.03 billion in 1995 to $11.6 billion in 2021, according to the Observatory of Economic Complexity (OEC).

The two countries signed a Trade and Investment Framework Agreement in 2003, which aimed to expand trade and to secure favorable conditions for long-term development and diversification of bilateral trade.

Meanwhile, Saudi Arabia's Vision 2030 economic diversification initiatives are generating opportunities for US companies across industry sectors.

Saudi Arabia launched its Vision 2030 program in April 2016, laying out plans to diversify the economy, including through increased trade and investment with the United States, according to a US State Department 2023 fact sheet.

"Around 750 American companies operate in Saudi Arabia in various sectors -- especially finance, insurance, construction, agriculture, fishing, processing industries, mining, quarrying, transportation and storage," al-Khawaldi said.

These companies have "an estimated capital of about 90.6 billion SAR ($24.2 billion), and there are more than 21,034 American brands in Saudi markets," he told Al-Fassel.

As for Saudi exports to the United States, they include mineral products, organic and inorganic chemicals, fertilizers, aluminum and aluminum products, with a total value of more than 53.5 billion SAR ($14.2 billion), he said.

Cooperation in oil sector

The economic relations between the two countries are built traditionally on oil, al-Khawaldi said.

"It is not possible to talk about Saudi oil and mining companies such as SABIC and Aramco without mentioning the American side, which had the most prominent role in the successes that both companies have achieved locally, regionally and globally," he said.

Saudi Arabia is the third leading source of imported oil for the United States, providing about half a million barrels per day of oil to the US market, according to the State Department 2023 fact sheet.

In late January 2019, Aramco announced it was ready to pour billions of dollars into the US natural gas sector.

Aramco Chief Executive Amin Nasser told Reuters at the World Economic Forum in Davos that the company will invest more than $10 billion into Motiva, its largest US refinery. And that was only the first installment as part of a 10-year plan to invest $150 billion in natural gas.

Saudi weight in the region

The US-Saudi economic relationship has evolved over the years and is likely to continue to develop, said Fadel al-Hindi, supervisor at the Center for Social Research and Humanities at King Abdulaziz University.

"The chronology of this relationship shows continuous evolution, especially in the areas of trade, economy, armament, politics and security," he told Al-Fassel.

This ability and willingness to evolve stem from mutual benefit, he said.

High profile trade deals with Saudi Arabia have created hundreds of thousands of American jobs, he said.

"American influence has become obvious in the Kingdom with the popularity of US companies, and Saudi Arabia has sent its students on grants to study abroad in the United States," he added.

This exchange has had a great impact, especially now as Saudi Arabia is moving towards more openness and a diversification of its economy, he said.

The United States is also fully aware of Saudi Arabia's weight and influence in the region, an important factor in maintaining a strong and stable relationship, al-Hindi said.