USA-Saudi Arabia Relations and Impacts on India |ForumIAS

UPSC Syllabus Topic: GS Paper 2 –International Relations

Introduction

USA–Saudi Arabia ties rest on an 80-year-old, transactional “oil-for-security” alliance that now extends into defence, energy management and technology. The recent Summit, driven by the personal bond between U.S. President Donald Trump and Crown Prince Mohammed bin Salman (MbS), is reshaping this partnership, altering the regional balance in West Asia and creating important security, energy and economic implications for India.

Historical Evolution of the USA-Saudi Arabia Alliance

Origins and durability of the bargain

The relationship began in February 1945 as a secret “oil-for-security” deal between Franklin D. Roosevelt and King Abdul Aziz on the USS Quincy in the Suez Canal.
It exchanged assured oil supplies for American protection and predated institutions such as the UN, NATO and the Bretton Woods system.
Originally meant to last 60 years, it was renewed in 2005, making it one of the oldest strategic transactional deals still in force.

Energy transformation, trade shifts and early strains

Shale technology turned the U.S. into the world’s largest crude producer and a major exporter.
This reduced the direct commercial weight of Saudi oil and pushed the bilateral trade balance in America’s favour, even as U.S. exports remained steady.
As a trading partner, the U.S. now ranks below China and India for Saudi Arabia.
Relations also faced shocks from Saudi participation in the 1973 Arab oil embargo and its mid-1980s purchase of Chinese intermediate-range ballistic missiles from a country it did not even recognise.

Increased Mistrust

During the Yemen war, U.S. decisions to staunch arms supplies weakened Saudi capabilities against the Houthis and increased mistrust.
The assassination of Jamal Khashoggi in the Saudi consulate in Istanbul in October 2018 further jolted ties.

Tilt Towards China and Russia

The Biden presidency initially kept MbS at arm’s length, prompting diversification towards China and Russia.
In December 2022, Xi Jinping’s visit to Riyadh, three separate summits with Saudi, Arab and Muslim leaders, and China’s role in restoring Saudi–Iran diplomatic relations strengthened this new outreach.

Gaza conflict and unresolved Israel–Palestine issue

Since late 2023, strong U.S. support for Israel’s brutal campaign in Gaza has made it harder for Riyadh to reset ties with Washington.
Saudi Arabia has resisted U.S. pressure to formally recognise Israel, insisting on a credible pathway to Palestinian statehood, which Israel has ruled out. This unresolved question remains a core political constraint on full strategic convergence.

Shifts Under Trump 2nd Presidency

Defence deals and big investments
In Trump’s second term, relations moved up sharply. His first foreign trip in May 2025 was to Saudi Arabia, where both sides agreed on $142 billion in U.S. military equipment. There, $270 billion worth of agreements were signed, showing stronger political trust and deeper economic engagement.
Strategic defence status and Saudi money in the U.S.

MbS promised to increase planned Saudi investments in the U.S. from $600 billion to $1 trillion. This amount is almost equal to Saudi Arabia’s GDP and the size of its Public Investment Fund, which already has about 40% of its foreign investments in the U.S.
A Strategic Defence Agreement gave Saudi Arabia “major non-NATO ally” status and bound Washington to help if the Kingdom is attacked.

Technology cooperation and unresolved gaps

Both sides advanced cooperation in civil nuclear energy and the supply of state-of-the-art AI chips.
However, observers doubt that all promises will be realised, given Trump’s “truthful hyperbole” and Saudi economic stringency.
Key differences on the global oil surplus, ties with Israel, Iran, and Saudi ambitions for strategic autonomy were not resolved, only set aside.

Geopolitical & Regional Impact

Saudi Arabia’s more assertive role: Revived U.S.–Saudi ties under Trump 2.0 are shifting the regional balance. Under MbS, Saudi Arabia has dropped its low-key style and is pursuing its interests after the Israeli campaign that has weakened Iran, its rival. White House backing makes MbS a long-term U.S. partner in West Asia.
Regional crisis brokerage: MbS has got Trump to lift sanctions on Syria’s new regime and has pressed for stronger U.S. action to end the Sudanese civil war. The Iranian President has sought his help to restart nuclear talks with Washington, turning Saudi Arabia into a regional go-between.
Oil, sanctions and big-power rivalry: Saudi Arabia relies on oil income. Coordinated U.S. sanctions on Iran, Venezuela and Russian oil majors curb oversupply, keep prices moderate and create space for higher Saudi and U.S. exports, while limiting Chinese and Russian influence.

Implications for India

Security implications via Pakistan: Closer U.S.–Saudi defence ties may indirectly benefit Pakistan. Riyadh’s defence pact with Pakistan, backed by Washington, can ease Pakistani access to U.S. military equipment.
Oil prices and energy stability: India prefers low oil prices but needs stability. Moderate prices can help while it finds alternatives to Russian supplies.
Openings in Saudi Vision 2030: Saudi Arabia’s Vision 2030, including AI data centres, can create investment and technology opportunities for India.
Space from limiting China: If U.S.–Saudi ties help curb China’s entry into Saudi markets, the space for India widens. This makes it important for India to prioritise a Comprehensive Economic Partnership Agreement (CEPA) with Saudi Arabia to lock in long-term trade and investment gains..
IMEEC and regional connectivity: An emerging modus vivendi between Saudi Arabia and Israel can ease work on the India–Middle East–Europe Economic Corridor, which passes through Saudi territory. Better relations in the region support India’s connectivity and trade plans.
U.S. transactional approach and India: The U.S. now prioritises strategic economic gains over earlier concerns like human rights or proliferation while engaging with MbS. This signals that pragmatic, economy-focused cooperation may help India strengthen ties with Washington, despite value differences.

Conclusion

The renewed but reconfigured U.S.–Saudi alliance helps Washington reclaim primacy in Riyadh while giving MbS greater autonomy and regional leverage. As the partnership moves beyond a simple oil-for-security bargain into an uncertain, interest-driven framework, India must closely track security linkages with Pakistan, leverage emerging energy and connectivity openings, and actively position itself inside evolving Gulf economic and technological networks.

Question for practice

Discuss how the renewed U.S.–Saudi Arabia partnership under Trump 2.0 shapes regional geopolitics and what implications it holds for India.

Source: The Hindu