How Saudi Arabia navigates global polarization and trade wars

There is little question that the world is today getting more polarized politically and experiencing more trade wars than at any other time since the end of the Cold War. In some cases, the two phenomena are closely intertwined, as in the trade war between archrivals China and the US, but in others the trade wars are waged among allies and close partners, such as between the US and its neighbors Canada and Mexico, or between the US and the EU.

The world economy is already showing signs of slowdown as a result. This week, the Organisation for Economic Co-operation and Development downgraded the prospects for global growth in 2025 and 2026, including in the US, Canada, Mexico and the UK. The Dow Jones index has fallen significantly, indicating uncertainty if not anxiety among traders.

While much of this started when President Donald Trump took office on Jan. 20, the previous administration had already laid the foundations for some of Trump’s actions. In a meeting in Alaska in March 2021, two months after Joe Biden took office, his Secretary of State Antony Blinken and National Security Adviser Jake Sullivan sparked an angry exchange with their Chinese counterparts in a public session, starting four years of intense rivalry. Biden’s 2022 National Security Strategy went into much detail about the US-China competition and what America was doing about it. It also identified Russia as a serious threat, mainly because of the Ukraine war.

Located on the crossroads of trade routes, GCC states benefit from booming trade and suffer during conflicts

Dr. Abdel Aziz Aluwaisheg

Saudi Arabia and its Gulf Cooperation Council sister countries have been trying to avoid getting pulled into any of these political and economic conflicts and at times have tried to mediate them. For starters, these countries sell oil, gas and their derivatives, which do well when the world economy is growing.

Reflecting the current turbulence, the Brent oil price has fallen from a peak of more than $82 per barrel in January to less than $70, down by more than 15 percent. Goldman Sachs has lowered its oil price target for the year by about $5, in part due to expectations of softer economic growth amid President Trump’s tariff policies. It now forecasts the Brent price at $71 per barrel in December.

In addition, GCC states thrive on brisk trade passing through their region. Located on the crossroads of trade routes between East and West since antiquity, GCC states benefit from booming trade and suffer during conflicts. Recently, as a result of Houthi attacks on shipping, trade has significantly diverted from the Red Sea amid rising shipping and insurance costs.

Conflict, political polarization and economic wars have combined to wreak havoc on the world economy and the entire multilateral system, while also weakening respect for international law and global economic and political rules of state conduct.

GCC countries have been trying to de-escalate these conflicts because they are also shocked by the loss of life in senseless wars in Gaza, Ukraine and elsewhere. They have offered grand bargains to both Iran and Israel, the two main regional antagonists, if they sued for peace and abandoned war. So far, their reactions have not been encouraging, but that could change if the rest of the world joined the GCC’s peacemaking efforts.

Similarly, on Ukraine, they have been at the forefront of peacemaking efforts since the start of the war, at times the only ones.

Since the start of the Ukraine war in February 2022, Saudi Arabia has called for a political solution to the conflict. It and other GCC states have offered their good offices to de-escalate the conflict and deal with some of its humanitarian repercussions. They have mediated the release of thousands of prisoners and the reunification of families from both sides.

In May 2023, Saudi Arabia invited Ukrainian President Volodymyr Zelensky to address an Arab League Summit in Jeddah and, in August the same year, it hosted national security advisers from more than 40 countries and international organizations to try to stop the war.

Since the start of the Ukraine war in February 2022, Saudi Arabia has called for a political solution to the conflict

Dr. Abdel Aziz Aluwaisheg

Last month, senior Russian officials met with their counterparts from the Trump administration in Riyadh for talks on defusing the two countries’ tensions and making an attempt to end the Ukraine war. Foreign ministers and top security advisers took part, facilitated by their Saudi counterparts.

On March 10, Crown Prince Mohammed bin Salman hosted separate meetings in Jeddah with Zelensky and a US delegation led by Secretary of State Marco Rubio and National Security Adviser Mike Waltz. The following day, senior Saudi officials facilitated face-to-face meetings between American and Ukrainian delegations. The Jeddah meetings followed the infamous diplomatic breakdown at the White House between Zelensky, Trump and Vice President J.D. Vance. The meetings in Saudi Arabia managed to contain the damage to US-Ukraine relations caused by that encounter.

The meetings in Saudi Arabia led to a proposed 30-day ceasefire, which has not yet materialized. Russian President Vladimir Putin this week agreed in principle with the proposal during a phone conversation with Trump, but said that details needed to be sorted out.

US envoy Steve Witkoff told Fox News this week that diplomatic talks between the US and Russia will take place in Jeddah on Sunday. He added: “Up until recently, we really didn’t have consensus around these two aspects — the energy and infrastructure ceasefire and the Black Sea moratorium on firing — and today we got to that place, and I think it’s a relatively short distance to a full ceasefire from there. I think both of those are now agreed to by the Russians. I am certainly hopeful that the Ukrainians will agree to it.” This will likely become clearer after Sunday’s talks in Saudi Arabia.

If the Ukraine talks succeed, that achievement will hopefully spur movement on other conflicts such as in Gaza, Lebanon and Sudan. While bragging rights would be in order if they prevail, the more important consequence would be to spare the world the scourge of continued war and the gloomy prospects of an economic downturn if matters continue on their current trajectory.

• Dr. Abdel Aziz Aluwaisheg is the GCC assistant secretary-general for political affairs and negotiation. The views expressed here are personal and do not necessarily represent those of the GCC. X: @abuhamad1