Middle East Watch: Saudi Fuels Demand Slow to Recover Amid Geopolitical Reset

After five years of tense relations between Saudi Arabia and Turkey, President Erdogan’s visit to Riyadh and Jeddah last month marks a new chapter between the two regional powers. With Turkey dropping the murder trial in the case of the Khashoggi assassination and Saudi Arabia allowing its citizens to visit Turkey once again, Saudi Arabia's trade flows with Turkey are expected to grow and enhance economic growth for both countries.

The renewed relationship with Turkey gives Saudi Arabia more backing against its main regional rival Iran. In Yemen, Saudi Arabia is also backing a new presidential council that is mandated with leading a negotiated peace deal with the Houthis and ending the four-year conflict. While this process may take 18 months, the beginning of the process will likely mean fewer Houthi attacks on Saudi oil infrastructure. In late March, an attack on Aramco storage facility in Jeddah led to a 400,000 b/d decline in exports that week.

With the US, Saudi Arabia has also set to rebuild bridges in a meeting between Crown Prince Mohammad bin Salman and President Biden likely to occur in June. The US president has so far refused to engage with MBS due to his role in the Khashoggi assassination, dealing only with his direct counterpart King Salman. The potential meeting in June will likely come with concessions on the part of the Saudis where MBS is still working on rehabilitating his image globally. Saudi Arabia could begin to be more responsive to the US calls to increase oil production and use its leadership role in OPEC to sway the group.

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