What Biden's presidency means for U.S. foreign policy

Ambassador Adam Ereli, former U.S. Ambassador to Bahrain, joined Yahoo Finance Live to discuss his outlook for U.S. foreign relations under a Biden Presidency.

Video Transcript

- Tensions are rising in the Middle East following the killing of a top Iranian nuclear scientist. For more on this, we want to bring in Ambassador, Adam Ereli. He's a former US ambassador to Bahrain, also the Deputy State Department Spokesman. And Ambassador, thank you so much for taking the time to join us today. Let's just start with this assassination, because it really has turned everything upside down. We know President-elect, Joe Biden, has been eager. He said that he is eager to reenter the Iranian nuclear agreement. What does this assassination-- was does it mean for the Biden administration? What does it mean just in terms of resetting, or the potential to reset relations with Iran.

ADAM ERELI: Well, I think it's important to point out that the assassination of the-- of Fakhrizadeh, who was head of the Iranian nuclear program. Many people want to tie it to the US political calendar. But given the sophistication of the assassination, you have to be certain that it was being planned for a long time. It was a target of opportunity. And the Israelis clearly took advantage of that moment when they could do it.

But you know, it certainly doesn't make Biden's job any easier. Although, I think that those who expect a sort of return to the good old days of Obama's relations with Iran, are going to be disappointed. And it has almost less to do with United States than it has to do with Iran. Iran doesn't trust the United States. Trump's pulling out of the JCPOA I think torpedoed almost any chance for successful diplomacy by any administration.

Because frankly, the Iranians are going to say, even if we sign with you Biden, you know, how can we be sure that then your successor is going to honor it. And they've got a point. There are also those in Congress who say, any agreement has to be codified in law by a treaty. Getting that to Congress is going to be very difficult. So the short answer is, you know, Fakhrizadeh's assassination not withstanding, dreams of a warm peace, or even a tactical deal with Iran, I think are grossly exaggerated.

- Ambassador, good to have you here. I want to ask this from the standpoint of a 1980s young kid, who when things got bad in the Middle East, oil prices went crazy. That doesn't happen so much anymore. We're looking at oil today, WTI was at $45 roughly, a barrel. OPEC is going to be cutting production. So the question I have for you, because some investors are listening to this discussion thinking, OK, is the play oil? What's the play? But from the Biden administration, is the play, do we have to not worry about Israel and Iran, but more Saudi Arabia and Iran. Because one, Iran can attack if it really wanted to, the Saudi oil fields. They could use players in the Middle East to do that. And those two, Saudi and Iran, are just like this. So who's to gain here? And what's the play for us as the United States?

ADAM ERELI: Yeah, well you know, first of all, like you know, I can't believe you dated yourself like that. But I'm even older. But anyway, look, parallels to the past are not a good guide for the future. Oil markets have changed so much in the last 10 years, in terms of the production side, in terms of the demand side, and in terms of the political side. You have so many more producers. You've got a much more fluid market. You've got much greater alternatives for supply.

So I would caution anybody who focuses on one specific area as being determinative for the global market, I would caution them against that kind of myopia, frankly. That's as a general statement. But more specific to your point about Saudi Arabia and Iran, again, you know, the United States has a strategic interest in maintaining the stability of oil market. Both in terms of production, as well as in terms of supply, meaning, through transportation. And obviously, I think a third of the world's seaborne oil is traded through the Straits of Hormuz.

So we're not going to let Iran, even if it wanted to, take the kind of action that would have significant ramifications to international oil supply and prices. I don't see that happening. So my advice would be, don't figure Middle Eastern conflict into your pricing and supply calculus. It's going to be much more stable than that.

- Ambassador, the Middle East can be very challenging, to say the least. And in your notes that you sent over, you talked about how the new administration is going to have to balance, or somehow try to balance, the use of force, and also balancing that with diplomacy. I'm curious just to get your take on the best way to do that, or the best way to approach that going forward.

ADAM ERELI: You know, it's a good question. And I think the reason it's relevant is, because if you look at what the leading officials in the Biden administration have written. And by that, I mean Tony Blinken and Jake Sullivan and Michele Flournoy, who is expected to be the Secretary of Defense, and Linda Thomas Greenfield. They've all said a couple of things. They've said number one, we're going to put a renewed emphasis on diplomacy. And number two, we're going to take a very careful look at the use of force in America's military deployment overseas.

But the fact of the matter is, it's very hard to take a cookie cutter approach to this. You know, there's a saying in military planning, or in boxing, that you know, the enemy has a vote, right. So you've got to maintain enough capability and enough flexibility to respond to all kinds of contingencies. And if there's one thing we've learned from Middle East is, the actors there have a way of surprising you. So yes, I think you'll expect to see more action by diplomats in dealing with conflicts and conflict resolution, but that doesn't mean you can just sort of put your weapons in back in the shed and walk away and close the door. Because you're going to need force as an incentive, as a deterrent, and frankly, as a response.

You know, the Middle East is a rough neighborhood. Adversaries are going to challenge us. And the world is going to be watching to see how the Biden administration's responds. That's going to be a very testing time for the new officials in Washington.

- Could the Biden administration use diplomacy, though. Force, we've seen it work successfully with President Trump. Could the Biden administration use diplomacy to reach young Iranians. Because we need a government change in Iran, obviously. But don't they want that? And shouldn't the US be helping those people who we didn't back during the Obama administration change their government?

ADAM ERELI: Right. And that's a question that nobody-- that people a lot smarter than I have never quite figured out. You're right that I think that the Iranian people want a change of regime, that they have lost faith in their leaders after 40 years of failed policies and brutal repression. At the same time-- and then they do admire the United States. But at the same time, there's a lot of baggage with the United States, particularly, you know, with the ousting of Prime Minister Mosaddegh.

And so the conundrum has been, you don't want to suffocate them with your embrace. And how much help by the United States would taint the opposition. And we've never gotten that balance right. And then on top of it all is, you've got a power structure in Iran that makes it very, very difficult to effect any meaningful change.