Saturday, August 06, 2005

A relationship of mutual dependence: The United States and Saudi Arabia

As oil and gas prices continue to soar (here in Toronto, regular unleaded is fast approaching $1.00/liter -- which is a lot, trust me), as King Abdullah assumes the reins (and the reign) in Riyadh, as Iraq comes to look more and more like a quagmire from which there will be no easy withdrawal, and as terrorism continues to dominate the front pages on both sides of the Atlantic, there seems to be renewed attention on Saudi Arabia and its relationship with the U.S. Whether you accepted Michael Moore's controversial and admittedly one-sided depiction of that relationship in Fahrenheit 9/11 or not -- and I, for one, accepted much of it, including the frighteningly close friendship between the Bushes (H.W. and W.) and the Saudi royal family -- there is no doubt that the two countries are intricately linked:

President Bush might not have turned up personally in Riyadh yesterday but he certainly sent a high-powered delegation to pay his respects to the new leader of Saudi Arabia, King Abdullah.

The American turnout, led by Vice President Dick Cheney, former President George H. W. Bush, and former Secretary of State Colin L. Powell, was the latest signal that relations between the two countries have thawed since the strains of 9/11. But it was also an acknowledgment of a simple fact: like it or not, the United States is more dependent than ever on Saudi Arabia.

Obviously, the source of that dependence is oil. Renewable energy sources may be the wave of the future, but, at present, developed economies are oil-based and hence oil-dependent:

"The Saudis are in a great position today," said Jean-François Seznec, a professor at Columbia University's Middle East Institute. "We cannot be enemies with everybody. We need their oil desperately."

Indeed, the alternatives to Saudi Arabia are fewer today than seemed to be the case just three years ago. Predictions of a boom in Iraqi oil have been proved wrong; Iran, OPEC's second-largest oil producer, is locked on a collision course with the West; Venezuela is following an erratic path; and Russia's commitment to market reforms and foreign investments seems increasingly unreliable.

All this has added to Saudi Arabia's already impressive clout. What is more, other powers - mainly from Asia - seek greater access to its resources and have been increasingly courting the Saudis. "They can play the United States against other buyers, like China," Mr. Seznec said. "And why wouldn't they?"

Well, exactly. But here's what's interesting:

At present, I would say that conservative foreign policy is divided into three main factions: realists, neoconservatives, and moral interventionists. The first two are the dominant factions. Moral interventionism, perhaps best represented by Senator Sam Brownback of Kansas, isn't much of a force, though it seems to link up well with one of the dominant factions on the left, liberal interventionism. Isolationism, best represented by Pat Buchanan and once the most powerful faction on the right, is no longer a force at all.

Now, the realists -- George H.W. Bush, Henry Kissinger, James Baker, Brent Scowcroft, et al. -- have always accepted and even encouraged the oil-dependent relationship with Saudi Arabia. Indeed, many of them have profited from it significantly. If we are to believe the neocons, however, one of the goals of the U.S. invasion of Iraq was the lessening of dependence on Saudi oil -- and hence eventual regime change in Riyadh, not just Baghdad -- through control (via a friendly government in Baghdad) of Iraqi oil supplies and, it was dreamed, domino-effect democratization through the Middle East.

But the neocons, as we now know, were wrong. Their pursuit of democracy may have been, and may still be, noble, but their idealism blinded them to any sense of what would really happen once U.S. forces invaded Iraq and took down Saddam. There hasn't been a swift and easy political transformation in Iraq and Iraqi oil production hasn't been what it was hoped it would be:

Among the fringe benefits of removing Saddam Hussein from power, went the thinking in the United States at the time, would be a rapid recovery of that country's oil production. In some hawkish circles in Washington, it was thought that a free Iraq would eventually undercut OPEC's power and marginalize Saudi Arabia.

The day American troops entered Baghdad, Mr. Cheney told the American Society of Newspaper Editors that Iraq would be able to produce as much as three million barrels a day, "hopefully, by the end of the year."

Still more optimistic forecasts predicted that Iraqi production would climb to six million barrels a day within five years, and provided more fodder to the theory that American troops went into Iraq to break OPEC's back, weaken the Saud dynasty and reduce the kingdom's oil-based influence.

Of course, these predictions turned out to be wrong. Iraq's production is struggling at two million barrels a day because of the relentless targeting of pipelines and infrastructure by the insurgency. Exports lag prewar levels and today few, even among Washington's most radical neoconservatives, expect that a restoration of Iraq's oil sector will quickly chip away at Saudi Arabia's clout. The kingdom remains unrivaled.

Iran's production comes in a distant second, but that country, which just elected a conservative president, is at odds with the international community over its decision to develop a civilian nuclear program. That leaves Libya, a country at the center of attention from American diplomats and oil executives last year, but its reserves are less than a sixth those of Saudi Arabia.

Indeed, "Saudi Arabia has proved time and again that it is indispensable to the stability of oil markets". And this means that for the foreseeable future Saudi Arabia will continue to exert extraordinary influence over the United States. Given the friendliness between the two countries, it may do so in a fairly benign way, boosting oil production and generally keeping oil prices down at manageable levels, but, in return, there isn't much the U.S. will be able to do about what is still a relatively authoritarian regime at the heart of the Middle East, one with intimate ties to international terrorism (let's remember that the most famous Saudi of all, one Osama bin Laden, is still on the loose). The U.S. may say the right things, as Condoleezza Rice has, but it's unlikely, given this dependent friendship (and the Saudi royal family needs U.S. support and approval just as much as the U.S. needs Saudi oil), that the rhetoric will be backed up with anything in the way of substance.

But this relationship of mutual dependence can't last forever -- and, indeed, it may end sooner rather than later for two reasons:

1) Saudi oil reserves might not be as deep as the Saudis themselves want us to believe. It may be that Saudi Arabia has maxed out at peak production. According to the Times article linked above, "[q]uestions still surround Saudi Arabia, fanning doubt over the country's ability to meet the world's growing demand for oil. These revolve around the true extent of its huge oil reserves, the rate at which its fields are depleting, and the output at Ghawar, the world's largest oil field, which accounts for half the nation's output." The Saudis deny such allegations, but the truth is that at some point the Saudi oil supply will begin to run dry.

2) There will soon be a generational hand-over of power in Riyadh. Since its founding in 1932, Saudi Arabia has been ruled in succession by Abdud Aziz Al Saud and four of his sons -- Saud, Faisal, Khalid, and, until his death this past week, Fahd. The new king, Abdullah, is a half-brother to these four and is hence of the same generation. But it may very well be that he's already something of a lame-duck king, and it's not clear what will happen when he dies and the next generation (or one of his more conservative brothers) takes over. Abdullah's been running Saudi Arabia, more or less, since 1995, but "most Saudi watchers doubt he will be much more powerful than he has been to date, given his age, his brothers around him who don't share his political views, and the questions left unresolved as to which line of grandchildren will eventually inherit the throne".

Like the neocons (and many others), I would like to see a new regime in Riyadh. But that new regime could very well be one explicitly hostile to the U.S. and its allies. Similarly, I would like to see the U.S. and other developed countries invest more heavily in renewable energy and hence to lessen its dependence on oil generally and Saudi oil in particular. But, for now, there's simply no way to circumvent such dependence (contrary to conservative claims, drilling in the Arctic wouldn't help much). This means that we're stuck with this relationship of mutual dependence between the U.S. and Saudi Arabia, that is, with a friendship with an authoritarian regime at the heart of the Middle East.

All the U.S. (or anyone else) can realistically do now is encourage baby steps towards liberal democracy in Saudi Arabia, even if, realistically, a liberal democratic Saudi Arabia is a long way off. In the meantime, though, the U.S. (and everyone else) needs to prepare for the inevitable: a Saudi Arabia with a dwindling oil supply and a potentially hostile regime in Riyadh. Whatever we may think of the current regime -- and I, for one, don't think too highly of it -- a radicalized Saudi Arabia with nothing to keep it in check would be a lot worse.

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