Wall Street Embraces Saudis, Shuns Biden: Truthout

This month, President Biden has openly threatened to reconsider the close ties between the United States and Saudi Arabia, but the financial industry appears certain he’s not ready to put his money — or theirs — where his mouth is, Sam Knight wrote for Truthout.

Photo Insert: US President Joe Biden and Saudi Crown Prince Mohammed bin Salman bin Abdulaziz bump fists during a meeting Al-Salam Palace in Jeddah.

Wall Street leaders are visiting Saudi Arabia this week for an investment conference sponsored by the Saudi government, just two weeks after the White House said it would be reexamining the long-standing U.S.-Saudi alliance.

Top bankers to attend the gathering in Riyadh included JPMorgan CEO Jamie Dimon, Goldman Sachs CEO David Solomon and Blackstone Group CEO Stephen Schwarzman.

The trio, whose firms collectively manage about $4.8 trillion in assets, spoke on the same panel at the so-called Future Investment Initiative. “They will work it through and I’m comfortable folks on both sides are working through [it] and these countries will remain allies going forward,” said Dimon, of the strained ties between the US and Saudi governments.

The Biden administration lost its patience with the Saudi government earlier this month after Saudi officials sided with their Russian counterparts and cut oil production.

The White House accused the Saudi Crown Prince Mohammed bin Salman of failing to keep promises made to President Biden over the summer on hiking output to clear global oil markets of high prices, and of helping Russia’s invasion of Ukraine by keeping crude oil prices elevated. But attendance at the Future Investment Initiative suggests otherwise.

The annual event is a symposium that was established in 2017 by bin Salman, Saudi Arabia’s de facto ruler, as part of an effort to modernize and diversify the country’s oil-dependent economy.

Foreign direct investment in Saudi Arabia has increased since the first Future Investment Initiative was held, but the money has mostly been “channeled into oil assets instead of backing ambitious new projects,” according to Bloomberg.

The four largest US banks — JPMorgan, Citigroup, Bank of America and Wells Fargo — have invested over $1 trillion in fossil fuels since 2016. JPMorgan is the most prominent of the four in terms of its exposure to oil and natural gas drilling.

A think tank with close ties to the firm said earlier this year that banks’ climate promises shouldn’t be scrutinized by regulators because of “the aspirational nature of external commitments.”

The Public Investment Fund, the Saudi government’s sovereign wealth fund, manages some $620 billion.

All US banks but four have a smaller portfolio. Billions of dollars from the Saudi fund went to such US ventures as Uber, which has never turned a profit, and WeWork, which tried but failed to take its stock public in 2019 but collapsed.

The Saudis are also using oil revenue to build a futuristic city called Neom, which “has received its fair share of skepticism around feasibility,” as CNBC noted.

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