Blood and Oil, page 32
That’s what was so frightening. Iran has much less money than Saudi Arabia to spend on weapons, but the attack showed that didn’t matter. The Saudis were able to get oil production back on track within weeks only because Iran decided to graze, rather than demolish, the facility.
For the Saudis, the attack generated realization of two big problems. First, even after Mohammed wrested control from the competing family factions, the defense system remained in disarray. The Saudis had Patriot missiles to fire at the drones but no system for the Ministry of Defense to quickly request that they be deployed. And there was no way anyone would be held accountable—in a bureaucracy that sits below an absolute monarch, sophisticated systems are in place to shift and ultimately dissolve blame.
Someone working within the Defense Ministry at the time recalled seeing the process play out. Within hours of the attack, the official line was “this is not a Ministry of Defense issue,” since the Interior Ministry was responsible for oil security. Interior officials anticipated that line and pointed out there wasn’t anything they could have done because they lacked intelligence—and that was the fault of the General Intelligence Presidency, the awkwardly named agency responsible for gathering foreign information. In the end, the conclusion was that “it was nobody’s fault,” said the person inside the Defense Ministry.
The other big problem the attack exposed was the true nature of today’s alliance between Saudi Arabia and the United States. For decades, American officials viewed the kingdom and its oil industry as vital to the proper functioning of the world economy. US diplomatic, military, and intelligence personnel developed deep ties with their Saudi counterparts, and the United States proved itself committed to defending Saudi Arabia and its oil fields, heading off threats from Saddam Hussein in the 1990s. One reason the Saudis could afford to have their disjointed defense structure was that the United States had taken the lead on keeping Saudi Arabia safe. Even after 9/11, the personal ties between longtime officials inside the US and Saudi governments maintained the alliance. King Abdullah visited President George W. Bush at his Texas ranch in 2005.
Things changed radically between the early 1990s and 2019. The spread of fracking turned the United States into the world’s biggest oil producer by 2013. The American economy wasn’t dependent on Saudi oil anymore. Now it could pump its own.
Then Barack Obama made the nuclear deal with Iran, alienating Saudi leaders. Mohammed had high hopes that Donald Trump, with his visit to the kingdom early in his presidency, would renew the kind of relationship Saudi Arabia had under previous presidents. But as Trump showed Mohammed in that embarrassing White House visit, when the president displayed a poster board showing arms sales to the kingdom, this new White House was purely transactional. The decades-long US-Saudi alliance didn’t mean much to Trump and his deputies, and many of the old officials who kept that alliance going for both sides, men like Mohammed bin Nayef and former CIA director John Brennan, had been sent off to retirement, or worse.
Trump didn’t even seem terribly concerned with the security implications of an Iran that was now engaging in overt acts of aggression against a US ally. In the days after the attack, many US officials braced for an armed response by the United States. For years, America’s security establishment had believed that Iran didn’t engage in direct hostilities because it knew the United States would respond with force. Trump shocked them. In the days after the attack, he said there was “no rush” to respond, displaying what one longtime US intelligence official calls a “systemic gap” between the Saudis and the Americans. The Saudis wanted the old order, where America would serve as a regional protector, while the Americans now in the White House wanted Saudi business deals but had little interest in deploying American weaponry. The United States wasn’t about to rush to the kingdom’s defense.
“That was an attack on Saudi Arabia,” Trump said. “That wasn’t an attack on us.” And if the United States did decide to take action against Iran, he added, Saudi Arabia would be involved. “And that includes payment.” Trump did eventually send soldiers to the region, and the US killed Qassem Soleimani, a powerful Iranian general, in an airstrike months later.
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More than sixty yachts, including some of the biggest in the world along with their billionaire owners, were lined up along Saudi Arabia’s northwestern coast in October 2019 when Mohammed bin Salman’s eleven-ship flotilla began its slow parade into position. The star of the group was Serene, the superyacht Mohammed bought in 2015 not long after beginning his rise to power, followed by a collection of boats that supported the bigger boats and had room for additional guests. The Serene’s captain had taken to calling himself “Commodore” and referring to the fleet as “my navy.”
It was just a few weeks after the oil attack and just over a year after Jamal Khashoggi’s murder and the global uproar that followed. Mohammed wanted to show that Saudi Arabia could still draw the world’s richest and most powerful people. By that measure, “Red Sea Week,” an invite-only event designed to entice investors to build hotels and infrastructure in the vast NEOM project, was a huge success. The Serene hosted a premium event for VIPs, including Fang Fenglei, a Chinese financier with strong ties to the communist rulers in his country, and Mukesh Ambani, the tycoon who ran India’s biggest company. Tahnoon bin Zayed, the Abu Dhabi national security advisor, arrived in his own yacht and spent time with Mohammed on the Serene.
Rumayyan rented his own megayacht, Ecstasea, to host meetings, including with Carla DiBello and a business partner. Cocktails in hand, they played ping-pong.
The singer John Legend gave a private concert on Sindalah Island, which belonged to Egypt until Mohammed demanded the country hand it over in exchange for financial aid two years earlier. Robb Report, a luxury magazine, custom-built a small resort for the event. Michelin-starred chef Jason Atherton created a pop-up restaurant with a seven-course tasting menu inspired by the desert region. There was a bespoke spa, transparent kayaks, and a chance to race sports cars on empty desert roads along the coast. Ostensibly, Red Sea Week was to become a new event in the annual calendar akin to the Cannes Yachting Festival, but it had a bigger purpose for the crown prince.
For Mohammed, the Serene had become more than a mobile statehouse. Together with its support vessels, it was more of an armed, floating palace complex from which he could run the country, safe from would-be Islamic terrorists or coup plotters. It was a place to be himself as well.
The entire yacht was outfitted with the highest-quality video screens and music equipment, so that in a moment he could switch it from diplomatic gathering place to high-tech disco. There was one room even the crew weren’t allowed to visit—a helicopter hangar converted into a cutting-edge nightclub fitted with poles for dancers.
The yacht was a safe space for Mohammed as he tried to pull Saudi Arabia into the twenty-first century against the odds and the wishes of many cousins and thousands of clerics. And if the global public saw him as a budding autocrat, at least he could rely on the superrich to back him up.
In meeting after meeting, the discussion was about investment opportunities in Saudi Arabia. But each visiting financier couldn’t help but ask if Saudi Arabia would like to invest some of its money in his or her new fund or project. Saudi Arabia’s money, pooled so centrally and controlled so completely by the crown prince, remained a siren song for businessmen and politicians around the world. Few people on earth could slosh billions around so easily. The chance to catch some, even a few million, was too juicy to not take.
One afternoon, Masayoshi Son and Mohammed took a trip in a small boat to a pristine reef and went snorkeling for more than an hour. Pleasantries aside, Masayoshi had a secondary purpose. SoftBank was trying to raise a second $100 billion fund, and he was hoping his loyalty to Mohammed through his ups and downs would pay off. Would Mohammed like to be the cornerstone investor again? He had the gall to ask even as the first Vision Fund was reeling from big mistakes, like a massive bet on WeWork, an office-rental company masquerading as a tech start-up that would have been in serious difficulties were it not for SoftBank’s doubling down on its initial bad bet, and the poor performance of many of the other investments in the fund.
There weren’t many businessmen like Mohammed in the world, people with unbelievable access to money and the ability to decide in a second what to do with it. Masayoshi wanted him to look past the performance and think of the futuristic world just around the corner. Would he also double down?
That turned out to be what made him so unstoppable. It wasn’t necessarily the Ritz crackdown and consolidation of power that gave Mohammed his ability to hold on even after the Khashoggi murder. It was how tangled up he’d become in the most powerful market economy the world has ever seen. His relationship with Trump was good, if transactional, but more important was the way Saudi Arabia’s money was tied up in US infrastructure investments via Blackstone and technology companies via SoftBank’s Vision Fund. Mohammed had been a nobody prince a few years back; now he was the only prince, as far as the rest of the world was concerned. He’d become a vital component of the global economy, controlling the price of oil with one hand and doling out billions to major companies, enabling them to beat their rivals, with the other.
In the end, Red Sea Week was more about Mohammed’s ego than Saudi Arabia’s development. It probably didn’t help him temper his philosophy of international relations. He headed back to Riyadh emboldened.
Buoyed by what he felt was changing sentiment toward Saudi Arabia and a good reception by Donald Trump and other powerful leaders willing to maintain their relationships with him, Mohammed set in motion a plan to make 2020 his comeback year: 2015 had been his rise, 2016 the rollout of the vision for transformation, 2017 the beginning of change and consolidation of power, 2018 the global outreach and grand blowup after Khashoggi, and 2019 a year of regrouping and laying low.
To start to wipe the slate clean, Mohammed needed big achievements—or at least resolutions of issues following him around. He instructed his staff to make immediate plans to end the Qatar boycott, create peace in Yemen, and spare no expense in making Saudi Arabia’s hosting of the G-20 meeting in October 2020 an event no one could forget. He assigned Fahad al-Toonsi, a Saudi minister in charge of all the “gigaprojects” like NEOM, to make the event his topmost priority.
But his dialed-down approach to international relations didn’t last long. In December 2019, leaders of Turkey, Qatar, Iran, Malaysia, and Pakistan were scheduled to attend a summit of Islamic leaders in Kuala Lumpur. The publicly stated purpose was to discuss important issues afflicting Muslims around the world, but the underlying agenda was to rebalance the leadership of the Muslim world away from the axis of Saudi Arabia, the United Arab Emirates, and Egypt. After Mohammed’s new, aggressive approach to leading the kingdom had fully developed, weaker countries felt Saudi Arabia had become a liability.
Angrily, Mohammed summoned Pakistani prime minister Imran Khan to Riyadh for a meeting. It was a far cry from the friendly trip he’d taken to Pakistan in February 2019, one of his first big international trips after the Khashoggi affair. Khan had rolled out the red carpet, grounded all planes, and ordered JF-17 Thunder fighter jets to escort Mohammed’s fleet as it entered Pakistan’s airspace. Some $20 billion worth of deals were inked as the crown prince was feted in the streets. Newspaper editors received directives from the government not to publish a single negative story or tweet during that visit, and they mostly complied. Pakistan needed money, and Saudi Arabia wanted Pakistan on its team.
Now, in Riyadh, it was clear that Mohammed considered the Kuala Lumpur summit an unacceptable move. Mohammed is said to have demanded coldly that Khan cancel the trip after Khan tried to explain the purpose in more diplomatic terms. He is reported to have threatened that Saudi Arabia and the UAE would cancel all Pakistani visas immediately if he did not and there would be four million Pakistanis, who send money home to their families every month, on the street. Imran headed home, calling Malaysian prime minister Mahatir Mohamad to inform him he was canceling his participation.
“He’s a spoiled brat,” Imran told an advisor afterward. “We can’t afford to stand up to him.”
Epilogue
Decisive Storm
As leaders around the world were just coming to understand the magnitude and economic devastation that the novel coronavirus would bring in 2020, Mohammed bin Salman was distracted by a niggling family drama and frustrated by the low price of oil. To achieve his grandest economic dreams, he needed much more money—hundreds of billions of dollars, not the mere $25.6 billion he earned from the Aramco IPO.
Standing in his office in a plain thobe speaking to advisors and ministers, he was frustrated with the pace of the 2030 transformation. Oil prices were hovering in the $60 range, well below the level he needed to build all the megaprojects at once while affording an expensive, never-ending conflict in Yemen and a populace still used to handouts. This problem had been gnawing at the kingdom since Salman took the throne, with a flood of oil from the US fracking boom depressing global prices. And the problem was only getting worse. Saudi Arabia had been collaborating with Russia to limit production in order to keep the oil price from tanking, but that deal was fraying.
That was the backdrop for one of Mohammed’s most profound decisions in five years as the day-to-day ruler of the Kingdom of Saudi Arabia. Discussions with Russia broke down, and Mohammed decided to go nuclear. On a Friday evening in early March, he ordered his older half brother, Minister of Energy Abdulaziz bin Salman, to boost supply and flood the markets. In the staid and formal world of oil negotiations, it was a bombshell.
By the open of the markets on the following Monday, prices had fallen by more than 20 percent and would continue to fall to the lowest level in decades. In the coming weeks, storage facilities became so full that in some regions oil buyers were being offered money by suppliers to take crude off their hands. Mohammed was hoping that the price drop would put some of the companies responsible for the US shale boom out of business and put financial pressure on Russian president Vladimir Putin to reinstate a production cut. He also wanted Putin, along with Trump and other leaders, to understand that Saudi Arabia wouldn’t be pushed around on oil prices. Mohammed would dictate oil policy as he saw fit for the good of Saudi Arabia. If other countries wanted the kingdom’s help boosting prices, their leaders would have to come to Mohammed as an equal.
The problem was that Saudi Arabia was even more dependent on oil revenue than Russia. In an effort to boost the long-term price of oil, Mohammed was sabotaging the kingdom’s source of funding for its ambitious transformation projects as well as day-to-day expenses.
At the same time, he was smoothing his path toward coronation. Within hours of Mohammed’s decision to start an oil war, men in black masks stormed the homes of Mohammed bin Nayef, who had been restricted from leaving Saudi Arabia since the night he “resigned” as crown prince, and Ahmed bin Abdulaziz, Mohammed’s uncle and one of the last surviving sons of Ibn Saud who was fully mobile and of sound faculties. It was an odd development for most palace watchers—neither man seemed like any kind of threat.
MBN was broken and grumbling, and Ahmed was a shiftless old codger who seemed to shrink from the occasion whenever family members wanted him to take a stand. He was one of those princes who preferred his rarefied London digs to Riyadh family dramas. His only importance was that he was a full brother of the king, and as the oldest surviving son of King Abdulaziz who wasn’t on the throne, he was supposed to hold sway over the all-but-perfunctory Allegiance Council. But Ahmed hadn’t even assumed that position.
The apparent impetus for the arrests, which later broadened to include other staff and associates of the men, seemed almost laughable.
By 2019, MBN had a somewhat normal life compared to his house arrest in the months immediately following his withdrawal as crown prince. He was allowed to travel between his Saudi homes, including a ranch where he liked to vacation, and could attend family gatherings. His wife, suffering from cancer, was allowed to visit the United States that summer for treatment, bringing along one of their daughters.
But MBN remained sullen, and his griping was making its way back to Mohammed, who decided it was a problem when Ahmed got involved.
Though he’d long been disengaged from family politics, Ahmed had surprised Mohammed and King Salman in September 2018 when he confronted protesters gathered outside his London mansion in opposition to the bombing of Yemen. Don’t blame the Al Saud, Ahmed told the crowd; the bombing is the responsibility of just two men, the king and the crown prince.
Ahmed returned to Saudi Arabia not long after and made sure he got commitments from US and UK officials that they would intervene if the Royal Court acted against him. Once back in the kingdom, Ahmed too began griping. He took the portraits of King Salman and Prince Mohammed off his majlis wall—news of the insult quickly spread within the royal family—and his living room became a popular place for disgruntled members of the royal family to vent.
In late 2019, MBN was coming to Ahmed to complain, upset that the Royal Court had drained his bank accounts and slashed handouts to him and his family. After his wife’s trip to the United States for treatments, MBN was told she couldn’t travel outside the kingdom anymore until he paid the government billions of dollars that Mohammed accused him of stealing. It was an old accusation, one that Mohammed had leveled in 2017 claiming that MBN had misused Saudi government money earmarked for joint antiterrorism projects with the United States. MBN maintained that he spent government money properly and even contributed some of his own fortune for security efforts.
