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The Specter of Saudi Instability

Walter Russell Mead

Reports of dissension in Saudi Arabia continue to mount, as “palace intrigues” against the Kingdom’s defense minister leak into the open. The Sunday Times:

Prince Mohammed bin Salman, 30, is accused in an incendiary letter by critics claiming to represent “senior ranks of the Al Saud royal family”, of “major character flaws” and of being “unfit for high office”.

The letter, a copy of which has been seen by The Sunday Times, also charges the prince, second-in-line to the throne, with “youthful foolishness” for launching military strikes “against a defenceless people” in Yemen, Saudi Arabia’s impoverished southern neighbour.

In one way, this story is not surprising. There are literally thousands of members of the House of Saud, and they don’t all agree. And many decisions taken recently—like the Saudi military intervention in Yemen’s civil war—are controversial.

But the real story here is the unprecedented stress that Saudi Arabia is under these days. Iran’s regional push was already raising fears and putting pressure on a government that rests its legitimacy on the defense of Sunni Islam, and the collapse in oil prices, exacerbated by the Saudi decision to keep pumping, makes everything harder for the desert kingdom (though, Saudis hope, it causes some problems in Iran and now Russia too). Add in the global slowdown driven by China’s weakness, and it’s clear that the Saudi economy needs support from the government even as revenue falls. Already the Saudis are drawing on their reserves to meet current bills—and there could be lots more of this to come.

Saudi Arabia has long been a very cautious player on the international stage. The government may profess a radical religious ideology, but it has been geopolitically conservative. That’s not surprising; an extremely rich desert country with huge oil reserves and vulnerable frontiers is likely going to be a status quo power. The Saudis, and the royal family especially, haven’t been interested in change—change is dangerous. That’s why the U.S.-Saudi relationship has lasted for more than 70 years despite frequent disagreements over issues ranging from Israel to human rights. The U.S. was willing to help ensure a stable geopolitical neighborhood for the monarchy, and the monarchy in turn mostly threw its weight behind the United States.

The core problem that King Salman and his supporters now face is a problem than any Saudi ruler would face today: The United States no longer seems willing to commit to preserving a favorable status quo in the region. Indeed, by signing the nuclear agreement with Iran, the United States has vastly added to Iran’s economic ability to push for regional dominance—and while the Obama administration has made promises intended to soothe Saudi fears, there is less and less confidence that the U.S. will actually step up its regional engagement in order to counter the new assets it has given Iran.

So what is an oil rich, absolute, Wahhabi monarch to do? King Salman and those around him have chosen an activist path. They supported the Egyptian army’s seizure of power in a rare direct confrontation with the United States, and they intervened in Yemen. In an effort to unify Sunnis under Saudi leadership, they led a coalition against the emerging Qatar-Turkey-Hamas-Morsi-era Egypt that effectively broke the Muslim Brotherhood and thwarted the AK Party’s efforts to center Sunni leadership on a different theological foundation than the Saudi platform. Since then, they have worked to rebuild a united Sunni front against Iran, especially in Syria. They have also been working with the Pakistani military in the hope that, should conditions worsen, the predominantly Sunni and increasingly Islamist Pakistani army would step in to help balance Iran. The Saudis have even flirted with a common front with Israel against Iran. Meanwhile, they have been cracking down at home, strengthening their ties with the clerical establishment, and crushing all signs of dissent, especially those from the Kingdom’s Shia minority.

This policy mix is expensive, and it raises spending at a time of low oil prices. Many important domestic interests are upset by this cost, including the many members of the royal house whose own revenues and economic well-being suffer when oil prices fall. At the same time, implementing such a high profile, fast-moving policy has required dramatic shake-ups in the Saudi bureaucracy. Lots of people have been sidelined to make room for Salman loyalists, and many princes see Salman’s promotion of his favorite son to Defense Minister as a threat to their own positions.

All this adds up to the following challenge: It is not clear that the Saudi system can bear the weight that an activist foreign policy imposes on it—but many senior Saudis now fear that without an activist foreign policy the Kingdom cannot survive in its present form.The unsurprising result is that just as the Kingdom’s external position is becoming less secure and more vulnerable, the internal political environment is now also showing new stress. This is great news for Iran and Russia—confusion and internal dissension in the Sunni world always helps. Indeed, many in Tehran must be hoping that a faction inside the royal house that favors a deal with Iran, even if that is on Iran’s terms, could come to power. Factionalism is the curse of autocratic polities, and very sudden shifts of policy can take place as an inside faction looks to an outside power for support.

So far, from the standpoint of the rest of the world, it’s a welcome development that the current chaos and vicious warfare convulsing so much of the Middle East hasn’t affected the flow of oil. Indeed, the war is bringing prices down, as countries like Russia and Saudi Arabia are pumping all they can to maximize short term revenue (and, in the Saudi case, to put pressure on rivals like Iran). This means that even as the Middle East melts down, the rest of the world is benefitting from the economic stimulus that cheap oil provides.

But imagine if that changed: If the war in the Middle East began to interfere with the production and transportation of oil. Imagine an oil price of $200 a barrel or more as pipelines were blown up or as political instability or civil war stopped production in key oilfields. Europe, China, and Japan would sink into recessions. Already jittery financial markets would swoon, and other commodity prices would crash even as oil soared. Yet the problems of the Middle East—the migrant flow from Syria and across Libya, for example—would continue and even deepen.

Political turmoil inside Saudi Arabia is an early warning sign that the Middle East conflict is not just being fought out in the spaces between the oil fields, and that the instability of the war is beginning to impact the situation inside the great oil producers. We can hope (and here at TAI we devoutly do hope) that the world will be spared an oil crisis and an economic crisis even as we struggle with the war crisis in the Middle East. But for those who think the Middle East doesn’t really matter all that much anymore, and that the United States can safely turn aside and let sectarian fanatics fight it out with each other, a major oil crisis that destabilized the global economy would be an important wake-up call.

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