Trump secures US$600 billion Saudi investment pledge on Gulf tour

RIYADH: US President Donald Trump secured a US$600 billion commitment from Saudi Arabia on Tuesday (May 13) to invest in the United States after the oil power rolled out the red carpet for him at the start of a tour of Gulf states.

Trump punched the air as he emerged from Air Force One to be greeted by Prince Mohammed bin Salman, who later signed an agreement with the president in Riyadh on energy, defence, mining and other areas.

Saudi Arabia's investment commitment includes what the US described as the largest defence sales agreement between the allies, worth nearly US$142 billion.

Reuters reported in April the US was poised to offer the kingdom an arms package worth well over US$100 billion.

"I really believe we like each other a lot," Trump said during a meeting with the crown prince, Saudi Arabia's de facto ruler.

The US and Saudi Arabia had discussed Riyadh's potential purchase of Lockheed F-35 jets, two sources briefed on discussions told Reuters, referring to a military aircraft that the kingdom is long thought to have been interested in.

It was not immediately clear whether those aircraft were covered in the deal announced on Tuesday.

Trump, who is accompanied by US business leaders including billionaire Elon Musk, will go on from Riyadh to Qatar on Wednesday and the United Arab Emirates on Thursday.

He has not scheduled a stop in Israel, a decision that has raised questions about where the close ally stands in Washington's priorities, and the focus of the trip is on investment rather than security matters in the Middle East.

"While energy remains a cornerstone of our relationship, the investments and business opportunities in the kingdom have expanded and multiplied many, many times over," Saudi Investment Minister Khalid al-Falih told a U.S.-Saudi investment forum.

"As a result ... when Saudis and Americans join forces very good things happen, more often than not great things happen when those joint ventures happen," he said before Trump's arrival.

Trump called the Saudi crown prince a friend and said they have a good relationship, according to a pool report from the Wall Street Journal, adding that Saudi investment would help create jobs in the US.

BIG INVESTMENTS

Business leaders at the investment forum included Larry Fink, the CEO of asset management firm BlackRock, Stephen A. Schwartzman, CEO of asset manager Blackstone, and Treasury Secretary Scott Bessent.

Musk chatted briefly with both Trump and the crown prince, who is otherwise known as MbS, during a palace reception for the US president. And joining Trump for a lunch with MBS were top US businessmen including Musk, the Tesla and SpaceX chief, and OpenAI CEO Sam Altman.

MbS has focused on diversifying the kingdom's economy in a major reform programme dubbed Vision 2030 that includes "Giga-projects" such as NEOM, a futuristic city the size of Belgium. Oil generated 62 per cent of Saudi government revenue last year.

The kingdom has scaled back some of its ambitions as rising costs and falling oil prices weigh.

Saudi Arabia and the US have maintained strong ties for decades based on an ironclad arrangement in which the kingdom delivers oil and the superpower provides security in exchange.

MbS' ties with Trump have been smoother than with his predecessor, Joe Biden. Their relations were strained by the 2018 killing of Saudi commentator Jamal Khashoggi by Saudi agents in the Saudi consulate in Istanbul. US intelligence believed the killing was ordered by MbS. He denied involvement.

Trump has not included Israel on his schedule although he wants Israeli Prime Minister Benjamin Netanyahu to agree a new ceasefire deal in the Gaza war.

Israeli officials have put a brave face on Trump's decision but there are growing doubts in Israel about its position in his priorities as frustration mounts in Washington over the failure to end the war.

Israel's military operations against Hamas in Gaza and Hezbollah in Lebanon, and its assassinations of the two Iran-allied groups' leaders, have at the same time given Trump more leverage by weakening Tehran and its regional allies.

US and Iranian negotiators met in Oman at the weekend to discuss a potential deal to curb Tehran's nuclear program. Trump has threatened military action against Iran if diplomacy fails.

Trump is expected to offer Saudi Arabia, Iran's regional rival, an arms package worth more than US$100 billion, sources told Reuters. This could include a range of advanced weapons.

Trump's Middle East envoy, Steve Witkoff, said last week he expected progress imminently on expanding accords brokered by Trump in his first term under which Arab states including the UAE, Bahrain and Morocco recognised Israel.

But opposition by Netanyahu to a permanent stop to the war in Gaza or to the creation of a Palestinian state makes progress on similar talks with Riyadh unlikely, sources told Reuters.

LONG TIES BASED ON OIL AND SECURITY

Saudi Arabia and the US have maintained strong ties for decades based on an ironclad arrangement in which the kingdom delivers oil and the superpower provides security.

Trump has also said he may travel on Thursday to Turkey for potential face-to-face talks between Vladimir Putin and Volodymyr Zelenskyy on Russia's war in Ukraine. An aide to Zelenskyy said the Ukrainian president would take part only if Putin does. The Russian leader has not said if he will attend, and has questioned Zelenskyy's legitimacy.

Trump's second foreign trip since returning to the presidency in January - his first was to Rome for Pope Francis' funeral - comes at a time of geopolitical tension.

In addition to pressing for a settlement in Ukraine, his administration is pushing for a new aid mechanism for Gaza after 19 months of war and urging Israeli Prime Minister Benjamin Netanyahu to agree on a new ceasefire deal there.

Israeli officials have put a brave face on Trump's decision to bypass Israel during his trip but there are growing doubts in Israel about its position in his priorities as frustration mounts in Washington over the failure to end the Gaza war.

Over the weekend, US and Iranian negotiators met in Oman to discuss a potential deal to curb Tehran's nuclear programme. Trump has threatened military action against Iran if diplomacy fails.

Iran's Nournews quoted armed forces chief of staff Mohammad Bagheri as saying on Tuesday that Iran's neighbours should retain neutrality and that any aggression against Iran would lead to definitive retaliation.

Trump is expected to offer Saudi Arabia an arms package worth more than US$100 billion, sources told Reuters. This could include a range of advanced weapons.

Trump's Middle East envoy, Steve Witkoff, said last week he expected progress imminently on expanding the Abraham Accords, a set of deals brokered by Trump in his first term by which Arab states, including the UAE, Bahrain and Morocco, recognised Israel.

But opposition by Netanyahu to a permanent stop to the war in Gaza or to the creation of a Palestinian state makes progress on similar talks with Riyadh unlikely, sources told Reuters.