The Petrokingdom In Peril*

By Norman A. Bailey*
Friday, January 8th, 2016 @ 8:20PM

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“The decision makers of the Saudi government should not have any doubt that this blood will trouble them.  It will haunt them.”Iran’s Ayatollah Ali Khamenei  –

The eastern province, bordering on the Gulf, not only has a concentration of oil, it has a concentration of Shiites, who have traditionally chafed under Saudi fundamentalist Sunni rule, and who feel oppressed and discriminated against. An uprising resulting in extensive damage to the oil facilities would result in an immediate large spike in the international price of oil, which would be much to the benefit of Iran (and others, such as Russia).

The execution of Sheik al-Nimr has set off a firestorm across the Shia world, and an actual fire set by demonstrators who penetrated and sacked the Saudi embassy in Tehran.

In short order, the Saudis broke relations with Iran, along with downgrading or breaking off relations on the part of several Saudi allies, in the Gulf and elsewhere. In subsequent days, measures have been taken on both sides, and the level of confrontational rhetoric has risen. Saudi Arabia has even lowered the price of its oil exports, to damage further the Iranian economy.

What could have possessed the Saudi authorities to execute al-Nimr precisely at this point? There would seem to be no rush, since he has been languishing in prison for over three years, and several countries, including the United States, urged the Saudis not to carry out the execution. Much ink has been spilled over this conundrum, but the explanations suggested have been unconvincing, since the risks involved would appear to greatly exceed greatly any likely benefit.

I would suggest that the action was taken precisely to trigger a reaction in the eastern province that would then be used as a pretext to greatly increase security measures in the province, due to information that the Iranians were infiltrating agents of influence in preparation for encouraging an uprising, for the reasons given. If that is the case, the act would be quite rational, and might result in aborting any such rebellion and acts of sabotage, which if they were to take place, would not only severely imperil the Saudi regime but also plunge the world into another “great recession”.

Whatever the truth of the matter, the petrokingdom is definitely in peril, for this and other reasons. The al-Saud are beset on all sides and abandoned by their ally of many decades, the United States. It has not escaped their attention that a substitute is available, much closer at hand–Israel. More about that in future columns.


* Norman A. Bailey, Ph.D., is Adjunct Professor of Economic Statecraft at The Institute of World Politics, Washington, DC, and teaches at the Center for National Security Studies and Geostrategy, University of Haifa.

A version of this commentary was published by Globes [online], on January 7, 2016

Categories: 2016, ACD/EWI Blog, Arabian Peninsula, Ayatollah Khamenie, Bahrain, Daesh, Economy, Energy, Energy policy, Gulf, Iran, Iran deal, Iraq, ISIS, Islam, Israel, Latest News, Middle East Conflicts, Nuclear Iran, Oil, Saudi Arabia, Yemen

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