Beyond causing great hardship to the humanitarian community, the current crisis in Gaza has profound effects on how Saudi Arabia and Israel are relating to each other. A prospective normalization agreement between these two countries had made great progress before the crisis broke out; this accord may have been a historic turning point in the geopolitical landscape of the Middle East. With this deal, Saudi Arabia aimed to strengthen its alliance with the US, advance diplomatic ties, and get Israel to make concessions on the long-standing Palestinian issue. These talks have come to an abrupt end due to the hostilities that have broken out in Gaza, however, and Saudi Crown Prince Mohammed bin Salman, often known as MBS, is now in a difficult and delicate situation.

The ceaseless bloodshed has cast a shadow on his vision of regional peace serving as a basis for expanding Saudi Arabia’s economy.

The halt placed on the development of the desired Israeli-Saudi accord is at the core of this puzzle. MBS is now in a risky situation due to this abrupt pause that was brought on by the Gaza conflict. The crown prince now has significant challenges in realizing his goal of regional stability to support Vision 2030, his vision for economic change. His plans for a more diversified Saudi economy have been clouded by the horrific violence in Gaza and the possibility of a wider regional escalation.

During this situation, MBS’s need to tread carefully on the diplomatic tightrope in the face of conflicting domestic and international forces becomes clear. Leaders in the US and Europe are pushing Saudi Arabia to take a leading role in Gaza’s post-conflict development. In the meantime, Riyadh is under pressure from both local and regional forces to step up its support for the Palestinians in their time of need. It’s obvious what Saudi Arabia faces: how can it reconcile its strategic objectives and the interests of regional security with the demands of the international community for involvement?

It is essential to look at the kingdom’s changing foreign policy in order to understand how the Gaza crisis may affect Saudi Arabia’s regional position. MBS started a bold foreign policy agenda as soon as he came to office in 2015.

The main goal of his plan was to thwart Iran’s expanding sway over the region, and he put Saudi Arabia in direct conflict with its worst foe. To limit the influence of the Iranian-backed Houthi movement, MBS and the United Arab Emirates initiated a military operation in Yemen.

Because of Qatar’s backing of Sunni Islamist organizations, such as Hamas, Riyadh slapped an embargo on the country. In an attempt to destabilize Iran’s partner Hezbollah and start a political crisis in Lebanon, MBS dramatically forced then-prime minister Saad al-Hariri to quit while he was in Riyadh.

Notably, MBS’s harsh remarks ultimately led to the terrible murder of Saudi dissident writer Jamal Khashoggi in 2018, when he was visiting the Saudi consulate in Istanbul. Even though the goal of these activities was to weaken Saudi Arabia’s enemies, they ended up having the opposite effect. They alienated allies throughout the world; most significantly, in 2020, Joe Biden, who was running for president, declared he would turn Riyadh into a global “pariah.” Saudi Arabia reevaluated its regional policy in reaction to the criticism, shifting its focus to single-goal communication and stability.

This change was brought about by MBS’s comprehensive economic reform initiative, Vision 2030, which attempts to lessen Saudi Arabia’s dependency on oil exports and diversify the country’s economy. The United States started mediating talks between Saudi Arabia and Israel in this particular scenario.

The monarchy is wary of the political advances gained by Muslim Brotherhood affiliates during the Arab Spring in Egypt, Tunisia, and other countries, even if it has little love for Hamas, who started the conflict. Notably, the Muslim Brotherhood’s Palestinian offshoot is called Hamas. Thus, Riyadh has to strike a careful balance between putting a stop to the fighting in Gaza and moving closer to a diplomatic settlement of the Israeli-Palestinian conflict, all the while trying to avoid giving the impression that it is supporting Israel’s military efforts in Gaza.

However, Riyadh’s capacity to contribute significantly to Gaza’s post-conflict governance is still restricted. It is inexperienced with conducting military operations and ensuring external security beyond its borders. The Saudi military’s track record in Yemen is far from exemplary, further diminishing the likelihood of its involvement as peacekeepers under the United Nations flag. The prevailing circumstances suggest that Saudi Arabia may be open to a financial role in a UN-approved transitional administration to facilitate the return of Palestinian Authority control in Gaza. However, Saudi Arabia’s approach in this context is expected to differ from its past aid deals, which primarily involved financial transfers. In recent negotiations with Egypt, Riyadh expressed a preference for investment opportunities over cash transfers, reflecting a broader trend in its economic strategy. Unless the United States can improve the agreement with diplomatic incentives that Saudi Arabia had requested from Washington in exchange for reconciliation with Israel, a similar strategy is probably going to be used with Gaza.

            A possible energy crisis akin to the 1973 Arab-Israeli War, in which Saudi Arabia and other Arab oil producers placed an oil embargo on the United States in protest of its backing for Israel, has come to light amid the Gaza fighting.

This embargo, which is frequently veiled in legend, didn’t really do anything. Large oil firms quickly diverted supply from other sources, and there was not a severe national oil shortage—rather, huge lineups at American gas stations were largely the product of customer fear, allocation restrictions, and pricing controls. The panic generated by Arab oil producers asserting their power was sufficient to drive prices up. The equilibrium between world oil supply and demand largely maintained prices at elevated levels during the remainder of the decade.

Current concerns about a 1973-style embargo are exaggerated and rooted in a misunderstanding of the historical event. Unlike the situation in 1973, Saudi Arabia is not closely aligned with Israel’s primary foes and is not willing to take great risks to support Hamas, which is a Muslim Brotherhood offshoot allied with Iran. Recent production cuts by Saudi Arabia have already had little effect on global oil prices. Additional cuts might hurt Saudi Arabia’s standing with the US and China, two important customers. They are also unlikely to provide Saudi Arabia any influence. With the continued economic reform of Saudi Arabia being his principal objective, MBS has a stake in keeping the country’s reputation as a trustworthy economic partner.

It is anticipated that the Gaza crisis would culminate in months, instead of weeks, as all crises do. It is unlikely that the indirect Israeli-Saudi communication facilitated by the Biden administration would pick up steam as long as Israeli forces are stationed in Gaza.

The fundamental forces guiding the Israeli-Saudi talks haven’t altered, though. Both countries continue to acknowledge the advantages of developing stronger ties, especially in the face of regional challenges such as Iran. While there is still a barrier to taking any action toward Palestinian independence, it may become less severe if an increasingly accommodating Israeli administration takes office after Gaza.

Recognizing that every Arab arrangement with Israel has been, at its core, an agreement with the United States is crucial in this context. The United States has been essential in facilitating and maintaining these accords by providing the promises and incentives that have supported the diplomatic efforts. Saudi Arabia will always be drawn to the possibility of obtaining those types of advantages, regardless of what happens in Israel and Gaza.