This transcript is from a CSIS press briefing hosted on May 8, 2025.
Samuel Cestari: Hello, everybody, and welcome to this CSIS press briefing where we will preview key topics to watch in relation to President Trump’s upcoming trip to the Middle East, as well as geopolitical dynamics in the region.
A couple of housekeeping notes before we get started. Each of our speakers will offer several minutes of introductory remarks, after which we’ll turn to your questions. We’ll also be distributing a transcript of today’s call, which will be made available on CSIS.org.
With that, let’s go ahead and get started. I’ll turn first to Jon Alterman, CSIS senior vice president, Zbigniew Brzezinski chair in global security and geostrategy, and director of the CSIS Middle East Program. The floor is yours, Jon.
Jon B. Alterman: Thank you very much, Sam.
It’s hard for me to escape the idea that President Trump is going to the Gulf, because this is his happy place. His hosts will be generous and hospitable. They’ll be keen to make deals. They’ll flatter him and not criticize him. And they’ll treat his family members as past and future business partners. The Gulf itself is a developer’s dream, with mangrove swamps and sand dunes transformed into glittering complexes of malls, apartments, and fountains – often owned by people with connections to the rulers. It seems to me that, in the president’s mind, this is the world as it should be.
If you were to array all the strategic challenges on the president’s plate, the Gulf is related to all of them but it’s central to none of them. I mean, let’s think about it. The president wants to redefine the U.S. role in both the Indo-Pacific and Europe, where many of our closest investment and security partners are. Both regions are convulsed by the president’s tariff policies and they’re struggling to respond. The president wants to focus on managing relations with China and Russia, both of which neighbors fear are on a path of military expansion, and both of which have deep ties with adversarial states of great concern to the United States, North Korea, and Iran. Perhaps not coincidentally, both also have reported ties to the Houthis, against whom the United States just concluded a billion-dollar air campaign that lost three jets.
There could be a lot to talk about in the Middle East. Gulf states are cautiously supportive of the administration’s Iran nuclear talks, in part because they fear they’d be the first victims of a war with Iran. They could talk about ways to ensure that Iran’s proxies in the region don’t bounce back after Israel dealt many of them a brutal blow and the Assad regime’s collapse isolated Iran still further. Lebanon is at the top of that list and encouraging stability in Syria follows quickly behind. They could talk about a way to move forward to an endgame in Gaza, pushing Hamas from power and relieving the suffering of Palestinians there. They could talk about the sustained instability in Libya, Yemen, and Sudan, and the continued fragility of Iraq.
U.S. partners have confided to me that there are U.S. statements on all of these issues, but they don’t yet see U.S. policies. The U.S. government doesn’t speak with one voice and its actions remain uncoordinated. The president’s statement yesterday, that the United States had not yet decided whether Iran would be able to enrich nuclear – to enrich uranium domestically under a new nuclear deal, gives his negotiators greater flexibility but it also raises the question of whether the administration has a vigorous process in place to evaluate the various proposals being put forward by an Iranian negotiating team with decades of experience.
I expect the conversations will touch lightly on all of these issues, but the main purpose of the trip will be to give the president some wins. Trade and investment deals will be announced that will burnish the president’s image as a negotiator. Big numbers will emerge. Precedents will be established with applicability to the rest of the world. I’d expect some of the deals to involve areas such as AI and cryptocurrency. The Biden administration’s instinct had been to be circumspect, cautious of the impact of Gulf technology investments on Sino-American competition. The Gulf states’ mantra is there’s no need to choose sides. And I’d expect the president to be more open to that logic than his predecessor.
In the broader area of Sino-American competition, though, the Gulf has concluded that its external security remains inextricably tied to the United States. China lacks both the ability and the willingness to do much to protect the Gulf states from aggression. While the United States certainly has the ability, the rulers’ job is to ensure it retains the willingness. Having an administration that is largely disinterested in how they pursue their own domestic security, which is increasingly done with Chinese cooperation and technology, is a bonus for them.
So for a president who relishes a good fight, I’d expect next week to be a respite between rounds. The Middle East has devilishly complex problems that remain far from resolution. Recall that in his first term, the president kept repeating the United States has spent $7 trillion in the Middle East and got little in return. I don’t expect him to go and make more commitments. I expect him to come back with commitments from the region, and the region’s rulers will want to make sure he comes back happy.
Thank you.
Mr. Cestari: Thank you, Jon.
Next we have Daniel Byman, director of the CSIS Warfare, Irregular Threats, and Terrorism program. And please go ahead.
Daniel Byman: Thank you.
And I would echo Jon’s very important point that this is an easy trip for President Trump, as opposed to traditional first major visits abroad to Mexico or Canada or the United Kingdom, where you would expect protests. You would expect very contentious meetings with leaders. I don’t think that’s going to happen here.
But the Gulf leaders are going to be very focused on several of the regional crises and the U.S. role in these. And one that is very important to the Gulf states is the on-again-off-again conflict in Yemen, where they have intervened unsuccessfully. The United States, Israel, have bombed, largely with, I’m going to say, limited success. And I’m probably being charitable there.
But there has been a tenuous – I wouldn’t call it peace, but deal, that has – the Houthis supposedly have agreed not to attack U.S. shipping and U.S. vessels. This, however, excludes the all-important question of would they continue attacks on Israel, which seems quite likely, or at least that the Houthis will have significant incentives to do so whenever their domestic political situation gets a little ugly and uncertain.
A second issue that is, of course, dominating the region, and that includes the Gulf, are the various Israeli military campaigns. And we’re seeing this in Syria, where Israel has been supporting the Druze against what some claim is an aggressive effort to centralize power. But especially Israel has been active along its own border, and overall trying to keep Syria weak and off balance.
This is something that the Gulf states in general are fans of stability, and the kind of constant problems in Syria and the potential for greater Israel-Turkish confrontation is certainly not something they support.
And then the extensive renewed Israeli operations in Gaza are also going to be a concern. The Trump administration has not shown any inclination to put pressure on Israel, and I don’t think that’s likely to come up this trip. But it is something that will almost certainly come up.
But the big thing for the Gulf states will try to be – try to figure out what exactly are not just U.S. policies but U.S. priorities. There are so many different actors in the Trump administration. And the traditional voices, whether it’s the National Security Council or the State Department or the Defense Department, it’s a little unclear how much influence they have over policies, even policies in their domains.
There are many independent actors who have access to the president. So trying to understand what does the president really care about, where is there give, yet, on the other hand, what matters most to him? And they’re also going to try to understand to what extent ideas such as massive displacement of Palestinians in Gaza, whether there are future versions of those and things that historically would have been seen as, you know, very far out of leftfield are going to be the new norm.
So let me stop there, and thank you very much.
Mr. Cestari: Thank you, Dan.
Next we have Gracelin Baskaran, director of the CSIS Critical Minerals Security Program. Gracelin, please go ahead.
Gracelin Baskaran: Thanks, Sam.
Mining and energy are one of the priority sectors for the upcoming state visit, reflecting Saudi Arabia’s bold strategy to become a global powerhouse in strategic and critical minerals. Since launching Vision 2030 in 2016, the Kingdom has pursued one of the world’s most ambitious economic transformation agendas aiming to diversify its economy and reduce its dependence on oil, and at the heart of that strategy is a major push to expand mining and minerals processing.
It has recently emerged that the Saudi cabinet has announced plans to negotiate a memorandum of understanding with the United States focusing on bolstering collaboration in mining and mineral resources.
Saudi Arabia is making a bold, long-term play to lead the next era of mineral discovery. Over the past 15 years exploration budgets have skyrocketed over 300 percent with a sharp focus on gold, copper, and rare earths.
In 2024 we saw the Kingdom was one of the world’s top destinations for mineral exploration. Spearheaded by the Saudi Arabian Mining Company, also known as Ma’aden, Saudi Arabia’s accelerated exploration push has already brought results. The value of its mineral reserves nearly doubled in the past year to $2.5 trillion including significant rare earth deposits critical to defense, energy, and a variety of other economic important uses like semiconductors.
Ma’aden has rapidly ascended the global mining ranks. Share prices soared 370 percent over the last five years and the Saudi Arabian Mining Company now stands as one of the world’s 10 largest mining firms by market cap, and at the helm of it is its CEO Bob Wilt, who is a U.S. Army vet and West Point graduate.
For the United States, where mineral processing remains the most critical choke point and China controls 60 (percent) to 90 percent of capacity, a deeper U.S.-Saudi partnership presents a strategic opportunity to expand processing capacity, reduce dependence on China, and bolster long-term supply chain security.
Saudi Arabia is really positioning itself as a global mineral processing hub, driven by abundant capital, some of the world’s lowest energy costs, and direct access to vast underexplored mineral reserves.
The Kingdom now hosts the world’s lowest cost wind and solar PV projects, giving it a unique edge in energy-intensive mineral processing. The complexity of separating and processing specialty minerals like rare earths are particularly energy intensive.
Importantly, with ambitions to rank among the world’s top seven mineral processors by 2030, Saudi Arabia will be a key ally to friendshore supply chain capabilities. And finally, Saudi Arabia has a proven track record of partnering with Western mining companies to unlock mineral potential.
Its largest mine by production value, which is a major source of copper, zinc, gold, and silver, is a 50/50 joint venture between Ma’aden and Canada’s Barrick, while the country’s second largest bauxite reserves is 25 percent owned by U.S. aluminum giant Alcoa.
These high-profile partnerships signal Saudi Arabia’s openness to foreign investment in the mining industry and its strategic alignment with Western industry leaders to accelerate resource development.
The Trump administration has made it clear that mineral diplomacy is a strategic priority, evidenced by the high-profile initiatives in places like the Congo and Ukraine. As the U.S. deepens ties with Saudi Arabia, mining is likely to become a central pillar of that bilateral relationship with both nations aligned on the urgency of securing critical minerals.
I expect forthcoming partnerships both on a government-to-government level but also from the private sector, and mining to feature prominently in the next chapter of U.S.-Saudi cooperation.
Thanks, Sam.
Mr. Cestari: Thank you, Gracelin.
I’ll quickly mention that after our next expert we’ll turn to your questions.
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So, without further ado, our final speaker is Clayton Seigle, senior fellow and James R. Schlesinger Chair in energy and geopolitics with the CSIS Energy Security and Climate Change program. Clay, please go ahead.
Clayton Seigle: Thank you. Good morning.
Well, even before he gets on the plane President Trump has already scored an important win from Riyadh in the form of extra crude oil that has contributed to a sharp drop in oil prices. It might seem odd at first glance that Saudi Arabia is leading the charge to bring oil to the market faster than expected in kind of a distressed state. Prices are down about $10 a barrel. Oil demand forecasts are being revised lower, partially on account of the trade war. But we think the strategy makes sense for two reasons. The first one is simply to stay in good graces with President Trump, who, as you know, has been laser-focused on bringing oil prices down. And back in January, he had some sharp words for Saudi Arabia and OPEC, basically accusing them of withholding oil from the market and urging them to supply more. So these accelerated supply hikes are an easy way to placate President Trump and get themselves out of the doghouse, and set a favorable stage for some of those other deals that Dr. Alterman mentioned.
The other reason to supply more oil now is to win back some market share from the United States oil industry, which is not in a position to increase supply. We’re already, in the United States, at record high production, above 13 million barrels per day, the world’s top producer. The U.S. oil industry can’t do more – can’t supply more volumetrically without disappointing its shareholders. And that’s because the average break-even price for new United States onshore oil wells is about $65 per barrel. That’s higher than we have today. And it’s higher than most forecasters are expecting for the next couple of years. So here at home, the oil companies can’t really meet the president’s call to drill, baby, drill, or prioritize what he calls energy dominance. Their investors don’t care about energy dominance. They want energy dividends.
So because of the strict requirement for attractive shareholder returns, U.S. drillers are already slowing down in response to the oil price downturn. They’re employing fewer drilling rigs and fracking crews as their managements turn more conservative on spending. Saudi Arabia, on the other hand, has both the capability and the motivation to ramp supply at this juncture. It’s sitting on close to 3 million barrels per day of spare capacity. And Riyadh recognizes that U.S. shale will need to pare back activity in this price downturn. So I think that delivering more barrels right now offers that double win. It scores points with President Trump and it recaptures some market share that has been lost to U.S. exporters and others in recent years. I’ll pause there. Thank you.
Mr. Cestari: Thank you, Clay. And thank you to all of our speakers for the insights that you shared here today.
So at this time we’ll go and open things up for questions.
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So at this point we will go to our first question from George Condon, which is: What do you see as likely the biggest missed opportunity on the trip? The biggest difference between what President Trump will do and what a quote, “normal” president would be pressing for? Would anyone like to take a stab at that?
Dr. Alterman: Can I take a first swipe, and I’d be interested in, certainly, Dan’s experience. Dan – in full confession, Dan I had a marvelous conversation about Gulf geopolitical strategy in the hot tub of the Doha Sheraton about 25 years ago. And I’ve always respected his judgment on these things since.
Look, I think a more normal administration would have a strong theory of the case of what its priorities were and how it would bring together powers in the region and outside the region to drive forward those priorities in concert. And there would be a theory of the case of how they could relate to each other and how one could advance to the other, and how this would all go. I think the Trump administration often scans the world for ripe negotiating opportunities. It is very opportunistic. I think the president likes to be a closer.
But I don’t see the president either coming up with a priority list or coming up with a strategy to work down the priority list. I see him looking for quick wins, for gains, for keeping others off balance. And using superior American economic and military power. It’s just a different approach. I think the president is likely to have some quick wins, at the expense of being able to make progress on some of the things that he has decided are the most important priorities.
Dr. Byman: Let me stress Jon’s point about previous administrations would have emphasized the idea of the United States and its allies working in concert. And, you know, obviously there are hundreds of examples where that didn’t work. But that’s still the normal goal, is to lay out U.S. objectives, sometimes privately, sometimes publicly, and try to gather different regional actors around them. Right now, some of the opportunities would be trying to reinvigorate the ceasefire in Gaza, but also trying to put the new Syrian government on the right path. And I would say, especially in Syria, the regime there is potentially pragmatic.
There’s a lot we don’t know. But to do that, you want to make sure there’s a pretty clear incentive and punishment structure, and that countries that are rivals – like the UAE and Turkey – are not playing out the rivalry in Syria, that Israel’s security concerns are recognized but, at the same time, it’s not creating a dangerous cycle. So I think there are opportunities, both for perhaps some short-term relief in Gaza, but also some longer-term successes that could happen in Syria, that would be pursued by other administrations but probably will not be, on this trip at least.
Mr. Cestari: Thank you, Jon and Dan.
Our next question will be from Laura Ellen Knickmeyer. Laura, feel free to open your mic and ask your question.
Q: Sure. This is actually Ellen Knickmeyer with the AP. Thank you for doing this.
Could you talk – could you all talk about, you know, what, if anything, you expect as far as the MOU, or any progress that you expect out of the trip on U.S.-Saudi negotiations about the U.S. helping Saudi develop a civilian nuclear program? And it seems that the conditions on both sides – the strings attached to that, and the way those – I mean it’s no longer wrapped up, it seems like, in – you know, especially any – it’s become a separate deal, and maybe become more influenced by what happens with the Iran nuclear talks. If you could just talk about perhaps how this administration’s view – the U.S. administration may be different than previous administrations.
Mr. Cestari: Thank you, Ellen.
Jon or Dan, might you want to jump at that?
Dr. Alterman: I don’t have any specific information, but it’s my understanding that there would be a lot of ways to show progress toward an agreement on a Saudi nuclear program without fully committing to a partnership on it. And in a world where there are lots of deals and lots of success, I could see something incremental as a way to signal to the Saudis, as a way to signal to the region, as a way to signal to the Iranians, that this is something where the U.S. and Saudi Arabia are cooperating without removing this as one of the incentives the U.S. wants to maintain in the longer term to advance Saudi-Israeli normalization.
So I think you could demonstrate progress in this space without fully consummating an agreement to move forward, which would take a while anyway.
Mr. Cestari: Thank you, Jon.
Our next question is from Aamer Madhani, also with the AP: To what extent do you expect Trump to play up the contrasting optics of his expected warm welcome to the Saudi and OPEC+ response to Biden in his 2022 visit, when Russia needed the Saudis to raise production?
Mr. Cestari: Clay, do you want to take that one?
Mr. Seigle: Sure. And thank you for the question.
Yeah, it’s reasonable to expect that the warm welcome that the president receives will be kind of echoed around Washington, and obviously within the administration, as a sign of success in terms of our diplomatic cachet and our ability to influence overseas.
When it comes to the particular issue about dynamics with OPEC+, remember that – so, as I mentioned, the president is laser-focused on bringing oil prices down. I think the primary motivator there is macroeconomic and the hope that with materially lower oil prices than we’ve had in recent years, we will also have lower inflation. We will enable interest rates to come down, and overall have a more conducive environment for business success. I think that that’s the thesis.
But another motivating factor that the president has described in some detail, including the same remarks back in January to the World Economic Forum that I mentioned before, is his belief that lower oil prices will hasten an end to the war in Ukraine, Russia’s war on Ukraine; ;and the idea there, of course, being that Russia needs relatively high oil prices in order to have enough revenue to finance the war and the war machine.
And so it’s a little bit – it’s a different situation than we had back then in the previous episode that you mentioned. And so now things are, at least publicly, a little bit less cozy and aligned between Washington and Moscow. And so the duration of the war and the cost of the war, and the United States’ obligations to participate in certain capacities, are probably a driver, you know, in thinking about ways to bring the war to an end.
It remains to be seen whether these oil-price levels, which are also being brought lower because of the trade war and its impact on GDP growth – and forecasts obviously are being revised lower in that regard – but this all comes down to the question of how low of an oil price must be achieved in order to potentially motivate Moscow to change course with the war in Ukraine. There is no known price level that would achieve that goal. Directionally, that’s one of the motivations that the president has cited for trying to get prices lower. And of late they have been moving in that direction, in his direction.
Dr. Alterman: One point to add is that one of the challenges for the Gulf states of lower oil prices is it doesn’t necessarily imperil our economic diversification programs, but it certainly makes them harder. And the Saudi break even oil price is somewhere around $100 a barrel, and oil is currently at about $60 a barrel, partly because the Saudis are pushing it down. So there’s a real cost to these governments of increasing production because it actually reduces their revenue. And they’re in a point where their expenses are going up because they’re trying to diversify their economies.
Mr. Cestari: Thank you, Clay and Jon.
Our next question comes from Zaid Benjamin: How do you see the Gulf partners’ involvement in the current U.S.-Iran talks, in comparison to 2015 nuclear talks? And what kind of questions they have to Trump regarding this issue and the Houthis threat, as we see an escalation with the UAE?
Dr. Alterman: To a remarkable degree the Gulf states are much more supportive of U.S.-Iran talks now than they were in 2015. I think it’s partly because they have a little more confidence in President Trump. It’s partly because they see that the breakdown of the JCPOA has accelerated the Iranian nuclear program in quite a serious way.
They are fearful that military action with Iran is likely to put them in the splash zone. You know, it’s, I think, important to remember that Iran had unprecedented attacks against Israel in April and October, which Israel, partly using integrated air defense coordinated by the United States, was able to basically neutralize. I think, as the Iranians are looking at their abilities to strike back if they’re attacked, the Gulf states reasonably conclude that they are likely to be targeted in some way if they seem too close to an aggression against Iran.
So I think their goal is let’s get a good deal with the Iranians. They certainly have – a number of them have normalized relations with the Iranians. They have re-established diplomatic ties. They have talked about their desire to negotiate all of this forward. I think they start from the position that you’re never going to solve the Iranian problem, and you’re foolish if you try. The Iranian problem – as one of the rulers of the Gulf told me 15 years ago, you know, the Iranians have only been Shia for 500 years. They’ve been Persians for millennia. And that’s the core of the problem.
So I think that as they look at a long game, they think it’s important, as the Iranians are weak, keep them relatively weak. When they’re weak, try to negotiate something on the nuclear deal. Keep the U.S. engaged, because the U.S. is a vital element of all of this. But none of these problems actually get resolved. And I think one of their – part of their disquiet with the Biden administration is they thought the Biden administration was too optimistic about where this would all lead. And I think they find the Trump administration fellow-minded in its skepticism about the ultimate Iranian intentions.
In terms of the Houthis, they don’t think the Houthi issue goes away. I think they were frustrated that the Biden administration seemed to think that there was an easier solution to this. They would like sustained pressure on the Houthis. And they’d like the U.S. to continue to apply it, if not by active measures, as we did, as Dan said, in the previous few months, keeping a watchful eye and being willing to strike when the Houthis strike.
Dr. Byman: If I may, I’m going to add a few points to Jon’s overview. One thing for the Gulf states is, if you look back at 2015 the region really seemed to be in chaos. You still had the aftermath of the Arab Spring. You had Syria, where it looked like the Civil War was in full bloom. And you have these very strong proxy forces, as the Gulf states saw it.
Obviously, some of this still exists today, but the Iranian – Iran’s most important proxy, Hezbollah, is significantly weaker, both in terms of its power but, I think more importantly for the Gulf states, in terms of its regional prestige, due to its military defeats by Israel. Hamas, of course, has been hit hard. But also, very importantly, Syria went from, in some ways, Iran’s most important friend in the Middle East to Iran’s bitterest enemy. So as Jon said, I think the Gulf states believe that now if you’re going to negotiate, Iran is weak, it’s on its back foot, it has severe economic problems, that this is a good moment to do so. And they trust Trump a lot more than they trusted Obama or Biden. So that adds to their confidence as well.
Mr. Cestari: Thank you, Jon and Dan.
Our next question is from Sam Dagher: Jon, you spoke about incremental progress on nuclear cooperation. Do you and the other panelists see similar incremental progress when it comes to the defense pact that the Saudis seek, as well as perhaps some small advances in the ability of Israeli companies to access the Saudi market, similar to what happened in the UAE years before the Abraham Accords?
Dr. Alterman: Thanks, Sam.
I see this as very slow. It’s hard for me to imagine, at a time when the Israelis are threatening to ramp up the war in Gaza and are increasingly adamant about not having a political horizon for Palestinians, that the Saudis are going to feel that they can move forward a normalization with Israel. That being said, the Saudis clearly feel strategic alignment with a lot of things that – or, strategic alignment with a lot of Israeli priorities.
And they want to quietly build cooperation, probably covert for now and perhaps more overt in the longer term. But I can’t imagine in the current environment that you’re going to see much of any warming between Saudi Arabia and Israel, just because the political environment in Saudi Arabia would, I think, be extremely hostile. While they’re willing to give the ruler that benefited the doubt on a lot of issues, I think normalizing with Israel in the current context would be a step too far. And I think the Saudi leadership sees it that way.
Mr. Cestari: Thank you, Jon.
We have a follow-up question here from George Condon: Jon, could you elaborate a little on this being Trump’s happy place? Biden’s fist-bump trip and talk of Jamal Khashoggi and Saudi role in 9/11 seem like 50 years ago. Is anything uncomfortable likely to come up?
Dr. Alterman: Well, I think the Gulf rulers are going to try to make sure that nothing uncomfortable comes up. They’re going to want to leave the president with a very good feeling. As I say, a lot of deals, a lot of numbers that he can toss around and validate his success. Because ultimately, when the chips are down, they need the president to feel that he needs to have their back. I think the Biden administration came around to the idea that if you want to get anything done in the Middle East it’s a lot easier if you have the Saudis on your side and a lot harder if the Saudis are working against you. And they were also concerned that Saudi Arabia was tipping toward China. And that would be a strategic problem for the United States.
So the engagement with Saudi Arabia was always something that they felt forced to do, and the Saudis felt forced to pursue, but there really wasn’t a sense of warmth. I think there’s a sense of relief in Saudi Arabia that now we have an American president who’s not going to judge us. We have an American president who has a common-sense attitude toward a lot of the same social issues that we do in terms of not criticizing the treatment of either migrant workers, of not being bent on DEI issues.
I mean, those issues resound very well in Saudi Arabia and throughout the Gulf, and I think from a presidential perspective these are friends. Why are you judging them? Let’s make things easy, not hard.
And so, you know, there’s just, I think, going to be a lot of very positive mood music of governments that say, we’re fundamentally aligned; let’s try to cooperate where we can cooperate and it’s much more uncomplicated than it was in the Biden administration.
There’s not that sense of strain of having to swallow your discomfort. There is just a tremendous sense of comfort combined with a keen feeling in the Gulf that they really need the president to have their back.
Mr. Cestari: Thank you, Jon.
Our next question comes from Niki McKeown: Trump’s announcement of renaming the Persian Gulf ahead of his trip is interesting, especially as the announcement comes amid ongoing talks with Iran. What, in your view, is Trump’s ultimate goal vis-à-vis Iran and what strategy should the administration pursue in the near term?
Dr. Alterman: Dan, do you want to start, or?
Dr. Byman: Sure.
So I think in general one concern I have about the Trump administration is, you know, the traditional U.S. approach to policymaking where the different bureaucracies weigh in and you have the president’s overall guidance and you come up with options and steps forward that you adjust as new information comes in, you know, that really isn’t happening.
So you have a rather incoherent process with lots of individual statements and it seems to be that a special envoy is the one that’s carrying things forward. But that effort is severely limited by U.S. domestic politics, and what President Trump campaigned on and was very common is an almost magical deal where Iran not only gives up its nuclear program completely but also gives up any support of proxies and, in general, ceases to be a hostile power, and what made the nuclear negotiations a success under President Obama was really walling them off from other concerns and saying there’s going to be severe differences in other areas but the nuclear issue is the most important and a limited deal, a deal with many flaws, may be the best the United States can get.
So to have success what the Trump administration needs to do is figure out where it’s willing to make concessions, and Iran is in a weaker position than it was a decade ago. Its economy is significantly weaker and the good news is there seems to be more elite support for a deal including the supreme leader himself and the people he’s been putting in place.
Key leaders in the Revolutionary Guard are more supportive. So there is a real potential here. But the United States will have to recognize that there will be certain areas in terms of, you know, how much Iran is going to get rid of, how much it’s going to cut support for proxy groups that Iran simply won’t do.
And so, to me, the real step is actually figuring out what the U.S. negotiating position is and what its limits are, and then going forward and then trying to get allies on board as well.
Dr. Alterman: I totally agree with everything Dan said.
I think the president sort of scans the world and looks for deals and looks for ways to enhance negotiating strategy, and I think you can’t overemphasize the point Dan made, which is Iran is so much weaker than it’s been, partly because its proxies have been dealt such a decisive blow and partly because its economy is so weak right now.
I really don’t understand the Arabian Gulf issue. And the reason I don’t understand it is not because I don’t understand how folks on the Arab side of the Gulf would like it, but in my experience over the last 25 years, this is the single issue that unites Iranians of every stripe. It triggers royalists. It triggers nationalists. It triggers folks who support the Islamic republic and folks who hate the Islamic republic.
This idea of renaming the Persian Gulf, which in their mind has been the Persian Gulf for millennia, is such a profound insult. I don’t see what you get from doing it. I mean, the U.S. government for a long time has had constructive ambiguity of just referring to the Gulf. I just – it seems to me to be something that needlessly poisons the well with folks you are trying to negotiate with. It doesn’t really get you anything with the Gulf Arab states, and sends a message across the entire political spectrum in Iran of U.S. hostility when I think what you want to do is get them focused on how they could have a much more positive relationship with the United States and what that could mean for all the things they care about, most importantly the economy.
Mr. Seigle: I’ll jump in with the energy angle a little bit on this Iran-strategy question. And just to set the context, remember just a few years ago, while during the first Trump administration, when we had a bit of a semi-hot war and active conflict taking place in the Gulf, and oil assets of several of the Gulf countries were in the crosshairs, and so Saudi Aramco facilities and oil facilities in the UAE were coming under fairly frequent attack, Iranian-sponsored attacks. And, of course, the 2019 attack on the Abqaiq Saudi Aramco facility, the oil-processing facility, which took place then, and really focused attention on the potential vulnerability of those Gulf oil assets.
And so I tie it back to the trip and the administration’s Iran strategy because, notwithstanding everything I said a minute ago about Trump’s desire and approaches to bring oil prices lower, it could be upended if – and I don’t think this is anyone’s base-case scenario – but if Iran should go sideways and develop into a military blowup, that – we could get some price whiplash and we could actually see oil prices surge much higher if the market perceives that there is a real probability of a material supply disruption.
Again, I don’t think that’s a likely scenario, but I just wanted to bring up that all of the achievements in terms of bringing oil prices lower, working at least tacitly with Saudi Arabia and OPEC to do that, could be undermined. And, of course, the Gulf Arab states do not want to see a return to those years and that kind of kinetic conflict.
And so we’ve had a rapprochement between Riyadh and Tehran recently, and they’ve made some accomplishments on the diplomatic front there. And likewise I believe the Saudi defense minister, right, Prince Khaled bin Salman, just had a very high-profile visit to Tehran, and apparently even met with the supreme leader. So there has to be some sense that stability on that front is really important to both sides. And it’s also important for stability in the price of oil.
Thanks.
Mr. Cestari: Thank you, Clay.
Follow-up question from Sam Dagher: Israel says we are willing to give Iran-U.S. talks a chance, but in the end it will have to strike nuclear facilities. That’s the last thing the Saudis want, or at least that’s what we’re led to believe. How can they get Trump to embrace their position on this and not Netanyahu’s?
Jon or Dan, would you like to hit that one?
Dr. Byman: I’ll start out, and I very much would like to know what Jon is going to add on this.
So a couple notes we have to be cautious about. So the talk of an Israeli military strike on Iran’s nuclear facility has been going on for over 15 years now, right? And it’s shown up in multiple administrations. And for the most part Israel hasn’t done this, in part – well, there are a lot of reasons. One is, I think Netanyahu himself is often surprisingly cautious, more so than is recognized, in the use of force in the past. But the other is it’s actually militarily quite hard for Israel. And it could do a raid that could certainly disrupt the capabilities in the short term, but the longer term would be much harder.
And a lot of what people point to is the Israeli attack on the Iraqi nuclear reactor that – the story for a long time was that disrupted the Iraqi nuclear program. And now, through Iraqi archives, we actually know a very different story, which is that it led Iraq to redouble efforts on its nuclear program and expand its nuclear program. And so the United States has been very concerned about an Israeli strike in part for this reason, that it would make the Iranian program worse. The other U.S. concern is that Israel would do this incompletely and it might suck the United States in, where the United States might, somewhat unwillingly, have to finish the job. Which is certainly not something that the Trump administration has seemed to have wanted.
The caveat, though, is October 7th has changed Israeli politics dramatically. And as we’ve seen throughout the region, Israel has become much more aggressive. So this is certainly a possibility, but I’m not sure that the Trump administration favors an Israeli strike – especially given that it might bring the United States in. But again, you know, part of the this gets to the eternal question of who is the Trump administration? And we don’t have that regular policy process, so there are lots of different voices weighing in. And some would probably favor an Israeli role and others would be very critical of it.
Dr. Alterman: Once again, I totally agree with Dan. Just to put a couple of fine points on things, I agree that Prime Minister Netanyahu has been much more cautious in general than he’s thought to be, except I would also argue that in the last year he’s taken a lot of very risky bets. And, to his mind, they’ve all paid off – from assassinations of Palestinian leaders, to not accepting Biden administration peace proposals, and so on, and so on. To me, it feels like this is a less risk-averse Prime Minister Netanyahu than you’ve seen in the past.
I think he – Dan’s exactly right to say what the Trump administration thinks is less obvious than people assume, and very important for the Israelis to understand. I would imagine that there have been some pretty sharp statements between President Trump and Prime Minister Netanyahu about what American limits are. And pretty serious Israeli efforts to understand exactly what they mean and exactly what American redlines are.
From the perspective of the United States, and certainly from the Gulf states, the looming threat of potential Israeli strikes is actually helpful for negotiations, because it’s what happens if the negotiations – it’s what might happen if the negotiations fall apart. But an actual strike, as Dan absolutely rightly says, would not only put the Gulf states at risk, but could draw the United States into an open-ended war in the Middle East. And that’s exactly what President Trump has committed not to do.
So I think the Israelis are judging exactly where the Americans are. The Americans are trying to send the right signals to the Israelis. They’re trying to send a signal to the Iranians that we’re trying to protect you from this, and that’s why you have to negotiate. It’s, frankly, a lot of brinkmanship. And it’s dangerous. And, as Dan rightly points out, it is not clear that an Israeli strike would either be successful or that it would actually slow, rather than accelerate, the Iranian nuclear program.
I think the Israeli conviction is that while this is hard for us, it’s well within the possibility of the United States. And for a long time it seemed to me the Israeli goal is how do they position the United States to be committed to finishing whatever job the Israelis might start. And again, with the Trump administration and its attitude toward Middle East security commitments, its attitude toward open-ended wars in the Middle East, I think it’s especially hard to understand exactly where the limits and redlines are. And I would guess this is something the Israelis lose a lot of sleep over trying to understand.
Mr. Seigle: Quick note on the oil and energy aspect there. Most attention – and I think justifiably – is focused on a potential attack on Iran’s nuclear facilities, but don’t sleep on the risk of an attack on the nation’s oil assets. Those really represent an existential vulnerability for the regime. I mean, if Iran is not able to export crude oil and manufacture refined gasoline, the country would shut down. And the most important handful of facilities there, including the Kharg Island export terminal and some of Iran’s largest refineries, are apparently within range of Israel’s strike capabilities. I think that was demonstrated by those long-range attacks against Iranian targets last October.
So that potential for oil market whiplash that I mentioned from the recent downturn that we’ve seen to a potential spike, it’s not necessarily about a potential Israeli attack on Iranian oil. But if we were in that situation, it would be from Iran’s potential response because OPEC – and I told you about the spare capacity – they can easily cover an outage of Iran’s daily exports, a million-and-a-half barrels per day, but to contemplate a(n) attempted Iranian closure of the Strait of Hormuz, that’s – now you’re talking 20 million barrels a day crude and refined products that transit the strait. So – in addition to potential threats to those land-based facilities.
So, again, I think that Trump has scored an easy win from Saudi Arabia already with getting more oil than the market was expecting. But in order to safeguard that price reduction, he will also need Israel to hold fire on Iran and particularly the oil assets. I’ll leave it there.
Dr. Alterman: And it’s important to – and it’s important to note that Israel destroyed a lot of the air defense systems for some of the Iranian energy infrastructure in October, the goal being to demonstrate to the Iranians that they could have destroyed the infrastructure should they wish to and to make it easier to attack the infrastructure if they want to do it again, but to not escalate because the Biden administration had been very wary of what would happen to energy prices if Israel really took out a bunch of Iran’s energy infrastructure. But it is – as I say, it is well within Israel’s demonstrated capability to destroy a lot of Iran’s both production and refining capacity, as well as some of their shipping capacity.
Mr. Cestari: Well, I think we’re just about reaching time here. I want to thank our speakers and all of our participants for joining us today for this timely call. Please reach out for anything we can do to be a resource on the trip next week. We’re here to help. And as mentioned at the top of the call we’ll have a transcript distributed to all of you, and it’ll be available at CSIS.org as well.
So, with that, I hope everybody has a great rest of your day, and thank you for joining us.
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