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Saudi crown prince to meet with Trump amid slumping imports, diplomacy shift

Saudi Arabia's crown prince is scheduled to meet with President Donald Trump on Tuesday, arriving as US imports of Saudi crude have declined to levels not seen in three decades and as the administration undergoes a major shift in foreign policy leadership.

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* Crown Prince seeks US investment in cross-country trip

* Iran nuclear deal, Aramco IPO expected to be discussed

* Oil prices, shale likely not on agenda

The meeting with Trump will mark the beginning of Prince Mohammed bin Salman's US trip, which is expected to include stops in New York, Boston, Houston, San Francisco and Seattle over the next two weeks.

"This is a critical moment for the Saudis, but especially the crown prince," Matt Reed, vice president of Washington, DC-based consulting firm Foreign Reports, said Friday.

Reed said Salman's trip is the "most ambitious" since then-Saudi King Abdul Aziz sent his son, Faisal, on a cross-country US trip in 1943 aimed at establishing a "proper alliance" between the two countries.



"The crown prince wants to strengthen US-Saudi diplomatic ties and also bring American business to Saudi Arabia," said Ellen Wald, author of the book Saudi, Inc. and a consultant on energy and geopolitics. "Saudi Arabia has a major stimulus plan underway...and [Salman] will be looking to entice US businesses to open in Saudi Arabia."

Wald, a non-resident scholar at the Arabia Foundation, said she expects Salman will press Trump for support of Saudi Arabia's nuclear energy development plans and support for the kingdom's position on Yemen.

But oil issues, such as the growth of US shale and declining imports of Saudi crude, are unlikely to come up during the meeting, she said.

"More likely they will be focusing on regional geopolitical issues and global anti-terrorism cooperation," she said.

The US-Saudi relationship has long been steered by oil trade, but US imports of Saudi crude have declined as domestic outputs have risen.

In October 2017, for example, US imports of Saudi crude averaged 563,000 b/d, lowest since November 1987 and well below the monthly peak of 2.24 million b/d in May 2003, according to the US Energy Information Administration. US imports of Saudi crude averaged 943,000 b/d in 2017, the lowest annual average since 1988, when the US imported 911,000 b/d.

Bob McNally, president of the Rapidan Group and a former White House energy advisor, said Salman will come to the White House with a "long list" of topics to discuss. This includes Iran, Saudi nuclear plants, the Saudi Aramco IPO, and Saudi investments in the US, including investments in the energy sector.

McNally said he doubted direct oil market issues would arise given the current, relative stability of crude prices.

"Oil just isn't high on the list of priorities these days, not like it was five or 10 years ago," said Reed.

Similarly, David Goldwyn, president of Goldwyn Global Strategies and the State Department's special envoy and coordinator for international energy affairs from 2008 to 2011, said he doubted there would be much, if any, talk of shale or the oil market.

Goldwyn said that US support for Saudi Arabia's nuclear energy program, standards for overseas nuclear technology sales and, potentially, the Aramco IPO, may all be discussed.

IRAN DEAL

Salman's meeting with Trump will take place a week after Trump fired Rex Tillerson as secretary of state and named CIA Director Mike Pompeo his replacement.

Tillerson, the former CEO of ExxonMobil, has pushed for the US to stay in the Iran nuclear deal, but Pompeo has been a harsh critic of the deal.

May 12 is the next deadline for the US to waive oil-related sanctions on Tehran as part of the Joint Comprehensive Plan of Action. Trump has said he would refuse to authorize that waiver again if the US Congress and European partners do not "fix" terms of the nuclear agreement.

Wald said Friday that she expects the Iran deal to be "front and center" in the meeting between Trump and Salman Tuesday.

The deal was aimed at preventing Iran from developing nuclear weapons, which Salman discussed in an interview with "60 Minutes," scheduled to air Sunday.

"Saudi Arabia does not want to acquire any nuclear bomb, but without a doubt, if Iran developed a nuclear bomb, we will follow suit as soon as possible," Salman said in the interview, according to an excerpt released by CBS this week.

--Brian Scheid, brian.scheid@spglobal.com

--Edited by Kevin Saville, newsdesk@spglobal.com