Saudi Arabia, Oil, and the Future of the Middle East

In the Gulf States of the Arab Peninsula, there is no bigger state, no more powerful player on that stage than Saudi Arabia. Saudi Arabia is a dominant force in the Middle East, having some measure of involvement in the politics of the entire region. Similar to the United States’ involvement in the politics of nearly half the world, one can say that there are a lot of Saudi fingers in a lot of Middle Eastern pies, so to speak. Saudi Arabia is also one of the only friends the United States has left in that region, except for the UAE and Qatar. The UAE has large oil reserves, and the US has spent a large amount of wealth for construction and diplomatic efforts in the UAE. Qatar features one of the largest American bases in the Middle East, and is critical as a foothold for the US to access, trade, negotiate, invade and pressure the Middle East. Since the discovery of oil in the region, western powers such as England and the United States have endeavored to be involved in Arabia’s politics, seeking to secure rights, or at least access, to Arabian oil. The king of oil in the Middle East is Saudi Arabia. But what is the future of the Middle East, what moves are being made, and who do they benefit?

Rather than recount the entire history of the Middle East, we ought to look at a more contemporary example. In the last several months, international news sources in the Middle East have been buzzing with activity and commentary. Saudi Arabia has its eyes on Yemen, in what might be called an invasion of sorts. Why is this happening? The assassination of former Yemeni leader Ali Abdullah Saleh has rocked the existing Yemeni government, leaving them crippled and insolvent, helpless to prevent what appears to have been a Houthi takeover of the Yemeni state. Saleh, once a longtime ally of the Houthis, recently reversed his support of the Houthi rebels, and threw in his lot with Saudi Arabia; and some might say that where Saudi Arabia is involved, the United States is not far behind.

Why do the Houthis appear to be the culprits behind the plot to assassinate Saleh, and why was he involved in the first place with a northern Yemeni group of Islamic zealots bent on terrorism? Saleh had originally come to power following the assassination of his predecessor, Ahmad al-Ghashmi. After serving as leader for a long time, Saleh was eventually replaced, and his inability to accept this loss of power led to his acceptance of Houthi assistance to take Sana’a, the capital of Yemen in what became known as the Yemeni Civil War. The civil war was waged largely to reinstall Saleh into power, and to ensure he kept it. But with Saleh having recently reversed political course toward the Saudi oil monarchs, toward a government whose crowned prince, Mohammed bin Salman, is rapidly purging Saudi Arabia of its longtime Wahabbist elements and slowly moving toward westernization due to US influence, Saleh was murdered, in what reports are calling a sniper attack, likely from Houthis themselves.

And yet the conversation has not generally moved toward the idea that the Saudi Arabian invasion of Yemen may be a pretext for Saudi Arabia to seize Yemen, occupy it, and most importantly, control its oil reserves and production. Given the moves that Saudi Arabia has been making internationally, this perspective should be heavily considered. Saudi Arabia, with US influence, is seeking to make what can be described as an international oil conglomerate. Another indicator of the westernization of Saudi Arabia has been the relatively recent inclusion of Israel in the budding Saudi-US oil conglomerate. By changing its stance toward Israel officially, Saudi Arabia is shifting the balance of Middle Eastern socio-religious power away from Wahabbist Islamism, and inexorably toward the West, and perhaps in the future, toward capitalism.

What do these three nations, the United States, Saudi Arabia, and now Israel all have in common? The mutual goal of destroying Iran. A second reason for the Saudi invasion of Yemen and likely also part of the explanation is that Yemen appears to be supported and backed by Iran, and Iran and Saudi Arabia are engaged in a larger regional Cold War. The US wants Iran gone to eliminate the possibility of a nuclear arms race in the Middle East, as a power hostile to the West having bombs is not something the US wants. In fact, the only Middle Eastern power which the US is interested in seeing have nuclear arms is Israel. The idea of Saudi Arabia having nukes is not “really” on the table for them right now, and in some ways Saudi Arabia is uninterested in nuclear weapons given to them by the US.

If one assumes that states and their leaders are rational actors, and that leaders make decisions in rational self-interest, the US is interested in controlling the access that Middle Eastern states have to nukes, in order to have some control, and thus political and economic influence over Middle Eastern states’ ability to make war. But Saudi Arabia does not refuse American nuclear weapon technology out of ambivalence or virtue, but rather that Saudi Arabia does not want to be beholden to American nuclear disarmament regulations as a prerequisite for trade and aid, something to note, that the US violates in order to aid Israel. If Saudi Arabia wants the bomb, they will likely not get it with the help of the US, and may seek to gain it illicitly like Iran, ironically. Saudi Arabia likely wants the bomb in order to cement their power as the dominant Middle Eastern force, but they do not want the bomb on the US’ terms. But the bomb may still be a long way off for Saudi Arabia. The raw nuclear material in Saudi power plants is anywhere between 3–10% enrichment, not enough for a bomb. Uranium must be enriched to nearly 100% in order to be viable to put into a 4-stage ICBM.

Israel’s goal in seeing Iran destroyed is simple. Beyond pure survival, Israel does echo most of the decisions and rhetoric put forth by the US. Experts suspect that in a way, Israel is the tip of the American spear in the Middle East. The United States is playing a long chess game of eventually having complete military control of all of the oil resources in the Middle East, to ensure its national security future. The US is currently the world’s largest consumer of petroleum products and has been for decades, with estimates nearing 19 million barrels of oil consumed by the US per day, with China in second place at around 10.4 billion barrels a day. Other than Israel gaining a piece of that pie, Iran being removed from the board is Israel’s goal, arguing pure survival. The continuation of war in the Middle East is vital to both US and Israeli policy, as the richer the US is, the more military funding and other aid Israel gains, irrespective of whether or not this aid is violative of international aid regulations, which require unilateral nuclear disarmament. Many experts say that US aid to Israel is illegal, but nevertheless it continues.

Finally, Saudi Arabia’s goal to conquer Iran is perhaps threefold. One, Saudi Arabia is angry at the Iranians for not playing ball with this westernized oil conglomerate being established, and the Saudi sentiment toward Qatar is the same. Al-Jazeera, a prominent international news group funded by Qatar, is being censored and strong armed by Saudi Arabia in order to force Qatar to fall in line. Qatar has been making moves to get closer to Iran, and away from both Saudi Arabia and the US. Two, because of all of the American cash flowing into the country, billions per year, the more oil Saudi Arabia can control, the more they can sell to America. The more oil that Saudi Arabia can sell, the richer they can become, and the more funding Saudi Arabia can put into its own military, currently spending around $60 billion annually. To put Saudi Arabia’s military into perspective, they are around the top 5 military spenders currently, next to England, China, Russia, and of course the US, whose military spending is near $700 billion annually. Third, Saudi Arabia may appear to be on board with America’s long-term goal of destabilizing Iran to remove them as an ally of Russia, which has been showing support to Iran in what some have called a New Cold War.

The Syrian Civil War taking place between pro-Assad state forces and anti-Assad rebels is a complex and difficult to understand matter. It appears that Syrian rebels called the Free Syrian Army, backed by the US and originally from the Arab Spring, have been at war with the Syrian state forces under Bashar al-Assad, with support from Iran and Russia. The rebels are receiving help from the Kurdish YPG, a supposedly communist or leftist army of the displaced Kurdish state (and formerly US-backed), who are fighting to reinstate their home and reclaim Kurdish land that was seized by Iraq, Iran, Syria and Turkey. ISIS forces have been engaged in combat with Kurdish militias, while the Turkish government has also began fighting the YPG. The Islamic Front is a combination of various Islamist splinter groups and is funded by Saudi Arabia, currently fighting against both the Syrian military and Islamic State forces.

Private military contractors from both America and Russia appear in the region, and are operating and killing each other in this civil war, with perhaps over a dozen groups or more engaged in combat with each other. This conflict has the US, Russia, Israel, Saudi Arabia, Iran, Turkey, Syria, Kurdistan, and the Islamic State all involved economically, as well as militarily. Some have called this civil war the battlefield for the New Cold War, with America and Russia using the Middle East to flex their power and threaten each other. While Donald Trump may not seem like a rational actor (and likely isn’t), Vladimir Putin does seem to be.

The US Democratic Party’s accusations of Russian meddling in the 2016 presidential election has been criticized by some as worrying sabre rattling against the Russians, something Democratic incumbent Hillary Clinton, who lost to Trump in the election, would support. The Democrat establishment has been pushing for a supposedly nonpartisan, independent investigation into the Trump administration and campaign. The Democrats have no problem with openly declaring that Russia tampered with the 2016 election as an act of war. While Russia and Vladimir Putin deny this and point out American involvement in dozens of sovereign states’ politics, Hillary Clinton has stated that she sees Russia as a hostile threat, and wants to go to war with them.

China has also had a hand in the Middle East. China’s proposed “One Belt One Road” initiative is at least partially reliant upon good Chinese relations with Saudi Arabia, as China has taken steps to, like the United States, turn its currency into a petrocurrency, meaning that it is dependent upon the sale of oil for economic stability. This is part of Saudi Arabia’s cooperation with both East and West, that as long as Saudi Arabia can ensure stable oil flow, both the USD and the Yuan can be stable, secure, and dependable not just as currencies in their own nations, but also as international trade currencies. The OBOR initiative is expected to create what sources are calling a “New Silk Road”, a trade route from China through the Middle East, going into Africa. China has expressed interest in opening positive trade relations with both Middle Eastern and African states; President Xi Jingping as well as other Chinese officials have stated that, “China will trade with anyone”. China’s involvement within the Middle East may put pressure on Russia, which may negatively affect Russia’s relationship with Iran, and this may put Iran in a dangerous political position while their “Western” enemies gather strength.

If Iran and the Kurdish YPG both fall, the Islamic State will only have the Islamic Front to deal with, and without the Kurds to fight, Turkey may pull out of the war, which would lessen pressure on Saudi Arabia. Turkey has not been an enemy to Saudi Arabia, but has not been an ally either, and they may attempt to interfere with Saudi Arabia’s possible future invasion plans for the rest of the Middle East; time will tell. But as the Saudis seek to uproot and supplant the Houthis from power in Yemen, their invasion appears to be along the lines of the American invasion of Iraq and Afghanistan: invade, fight, and then exert control over the state while a government sympathetic to the occupying army’s interests is being installed, and power is gradually transferred over. If not directly to be taken over and consolidated as part of Saudi Arabia, they may simply install a puppet government in Yemen, leaving it as a “vassal” state under Saudi control.

If Iran can be destroyed, Russia is likely to back out of further hostilities with the US, leaving the state ripe for the Saudi picking, while America adds a point for themselves on the scoreboard against Russia in the New Cold War. Russia does not want war with the US, but they may find an ally in China. President Trump has ignited tensions with the Chinese through trade tariff disputes, and over Radio Free Asia reporters, backed by the US government, being arrested, detained and silenced by the Chinese CPC. It has been said that “nobody wins a trade war”, and if Trump squanders Chinese goodwill, the Chinese may reach out to Russia, which would strengthen both nations economically and militarily, as well as cement their involvement in the Middle East.

Saudi Arabia is focused upon expanding its sphere of control and influence, like America did with its “Pax Americana” initiative for exerting influence over Central and South American states to prevent the growth of communism. For the moment, America will help spread Saudi influence with military might, as long as the US gets a piece of the pie. But what happens if the Saudis decide to stop playing ball? Is the endgame of total Saudi control over Middle Eastern oil simply for power, or is there something larger at play?

As stated, both the US dollar and the Chinese Yuan are petrocurrencies. Both nations want good trade and good relations with Saudi Arabia in order to secure their currencies. But this puts Saudi Arabia in a good position to manipulate the oil flow, thereby manipulating each currency as Saudi Arabia desires. Saudi Arabia is in a position of power to control the economies of two of the most powerful states in the world; this is of unbelievable value to Saudi Arabian foreign policy and to the future of the state. This also gives Saudi Arabia the ability to ensure that China and the US both use oil that Saudi Arabia controls, and thus are dependent upon Saudi Arabian oil for their needs. Saudi Arabia is also vying for access to American and Chinese markets through mutual trade. As a result, Saudi Arabia is buying up billions worth of American securities, as a kind of an insurance policy to keep America playing ball.

The monopolization of oil, and US and Chinese investments are all about Saudi Arabia’s future, and this economic security for their state is just as effective as the increase in Saudi military expenditure. While about $60 billion is not enough to fund a military strong enough or large enough to defeat those of the US or China, Saudi economic domination of these nations is undeniable, and if pressed Saudi Arabia can use the oil against the two largest oil consumers in the world. Saudi Arabia’s aggression against their partners, if any, will be economic. American shale oil production is currently far outpacing its refining and manufacturing capacity, and as a result, the US has tapped a small hole into a massive resource. If US companies can sufficiently expand US shale production and refinery, America will overthrow Saudi Arabia as the top oil producer in the world. As the US is the top consumer, domestic oil production is key for Trump to legitimize himself as a leader. It is in the best interests of the House of Saud to prevent this, and so Saudi Arabia is working to own the rights to US shale oil, completely. Saudi Arabia is trying to cripple US domestic oil production, ensuring that the proverbial addict will need their dealer for centuries to come.

It may be that the US-Saudi partnership is temporary. Regardless, Saudi Arabia has their insurance policy ready against the US. The US will be able to invade, and would likely defeat the Saudi army if need be, but the CIA has no foothold inside Saudi politics, as the government is nearly 100% controlled by the House of Saud. To have an “inside man” to help destabilize the House of Saud is unlikely. If a future US-Saudi war does happen, Saudi Arabia will shut off the tap. America’s only option will be to replace the existing Saudi government to ensure the oil flows, but to insult and take hostile action against Mohammed bin Salman is not advisable, as MBS appears to be a friend to the West. To throw away such a friendship would be very short-sighted for the US. The invasion of Iraq and Afghanistan has been only partially successful in rooting out terrorism, and would be unsuccessful without the help of others, such as Russia. Nevertheless, the aftermath of 9/11 has been extremely costly for the US, and it is not an effective nation builder in the Middle East; the shaky, corrupt Iraqi government shows this. Iraq under Saddam stabilized the region, as Gaddafi did for Libya, and the US is a poor replacement for such stable, strong Islamist leadership in a still very Islamist part of the world. Without the Saud family, the entire Middle East will become a tinderbox.

Whether or not MBS is truly open to the West, or is simply appearing to be in order to secure insurance against the US is still being debated. MBS is couping not just his own government, but his own family as well. This replacement of Wahabbists in Saudi government is radical, and unheard of in Saudi history. If MBS is not assassinated in the future, he may radically change Saudi politics. One of his most talked-about reforms has been to allow women to drive, but what else will MBS decree in the future: democracy rather than Islamism? If MBS survives and stays in power, his relationship to the US will determine its role in the Saudi future.

Will the US allow one of the greatest oil markets in the world to remain closed to them, if MBS ends relations with America? Not likely. But neither is it advisable for the US to allow Saudi Arabia to stay Wahabbist. The US wants access to Saudi oil, wants to shift Saudi policy in a pro-US way, and keep it that way. While MBS holds most of the cards, the US still has its standard invasion strategy as a Plan B. For MBS to pull Saudi oil would cripple the US and China, ensuring the destruction of funding for China’s OBOR, and locking the US out of its own shale oil. It is in the best interests of the US and China to keep Saudi Arabia as a major player, and Saudi Arabia has the insurance to remain a major player. With the Houthis controlling a crippled Yemen state, a superior Saudi army is sure to be victorious, and after Yemen falls, Qatar and Iran are likely to be next, especially with US and Israeli help. But after that…who knows?