As former President Donald Trump begins his second term, the U.S. appears poised to adopt a tougher stance on Saudi Arabia over oil policy—reigniting a long-standing distrust between Washington and Riyadh. For decades, U.S. leaders have viewed the Kingdom warily, tracing back to the 1973-74 oil crisis that exposed American dependence on foreign crude.
This mistrust deepened after Saudi Arabia launched an oil price war in 2014, a move seen as an attempt to crush the emerging U.S. shale oil industry. That strategy failed, but its economic and political damage still lingers. Now, with oil market forecasts pointing to prices below Saudi Arabia’s breakeven budget needs, the U.S. may no longer feel obliged to tolerate Saudi maneuvers.
According to a senior Washington-based legal source who spoke to OilPrice.com, the mood in the U.S. capital is shifting. “We no longer have to put up with any more crap from the Saudis,” the source said.
Oil Prices, Economy, and Politics
Presidents, including Trump, have long understood that oil prices directly affect both the economy and their political futures. Historically, for every $10-per-barrel rise in crude prices, gasoline prices rise by 25 to 30 cents per gallon. A 1-cent increase in fuel costs can drain over $1 billion from consumer spending annually.
Politically, the stakes are just as high. U.S. presidents seeking re-election have historically fared poorly if the economy is in recession. Since 1896, sitting presidents have won re-election 11 out of 11 times when the economy was strong two years before an election. In contrast, only one out of seven incumbents won re-election during economic downturns. The same pattern affects congressional and gubernatorial races in midterm years, making oil prices a key policy concern.
“Few things terrify an American president more than a spike in fuel prices,” said Bob McNally, former energy adviser to President George W. Bush.
The ‘Trump Oil Price Range’ and Saudi Pushback
When Trump first took office in 2017, he favored Brent crude trading between $40–45 and $75–80 per barrel. The lower bound protected U.S. shale producers’ profits, while the upper limit kept consumer fuel costs manageable. But in 2017, Saudi Arabia was still reeling from its failed 2014–2016 oil price war and coordinated with Russia under the expanded OPEC+ alliance to push prices higher.
Trump openly criticized the cartel. “OPEC and OPEC nations are, as usual, ripping off the rest of the world, and I don’t like it,” he said. “We defend many of these nations for nothing, and then they take advantage of us by giving us high oil prices. Not good.”
In 2018, when prices rose above the Trump administration’s preferred ceiling, he issued stern warnings to Saudi Arabia. Shortly after, the Kingdom raised output and brought prices down—marking the only time Trump’s preferred oil price band was breached on the high side during his first term.
2020 Price War and Trump’s Tough Response
In 2020, Saudi Arabia launched another oil price war to again pressure U.S. shale producers. Trump responded aggressively. On April 2, he called Crown Prince Mohammed bin Salman and threatened to withdraw U.S. troops unless OPEC cut output. According to a senior White House source, Trump also warned that repeating such actions would end the historic 1945 U.S.-Saudi agreement that traded security guarantees for oil cooperation. The message worked: Saudi Arabia and OPEC soon reduced production, and prices began to stabilize.
Saudi Fiscal Pressure and Growing U.S. Leverage
According to the International Monetary Fund, Saudi Arabia’s 2025 fiscal breakeven price is at least $90.9 per barrel. With Brent currently trading far below that, several flagship projects under the Kingdom’s Vision 2030 economic plan have been scaled back or shelved. The $1.5 trillion NEOM City development, for instance, has been cut from 106 miles in length to just 1.6 miles.
Saudi Arabia now faces budget and current account deficits, with public debt rising 16% last year to over $324 billion. A senior EU energy security official told OilPrice.com that without strong oil revenue and with U.S. retaliatory options off the table under Trump, Riyadh may become increasingly dependent on U.S. financial markets.
NOPEC Bill Looms as Major Threat
Trump has also revived the “No Oil Producing and Exporting Cartels” (NOPEC) bill. If passed, it would make it illegal for OPEC to coordinate production or pricing and would strip the group and its members of sovereign immunity in U.S. courts. This would expose Saudi Arabia to antitrust lawsuits, potentially allowing the U.S. to freeze assets, seize bank accounts, and restrict dollar-based transactions globally.
It could also force Saudi Aramco, the Kingdom’s state-owned oil giant, to break up into smaller entities to comply with competition laws.
With Trump back in office and Saudi Arabia under financial strain, the balance of power in U.S.-Saudi oil relations may be shifting. Washington appears ready to use legal, economic, and strategic tools to keep oil prices in check—and ensure that Riyadh stays in line.
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