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Page added on January 15, 2016
Saudi Arabia: A Weak Kingdom On Its Knees?
The great Kingdom of Saudi Arabia – the long-time dictator of crude oil prices for the world – is struggling on all fronts.
The Saudis are losing their proxy wars in both Syria and Yemen; their OPEC leadership is under threat; they are not winning the crude oil price war; and its long-running alliance with the West is in question.
From Saudi Arabia’s perspective, Iran seems to be gaining ground everywhere. Saudi Arabia has several weaknesses that help explain the current anxiety emanating from Riyadh.
1. Saudi Arabia losing its leadership in the OPEC
Saudi Arabia has been the default leader of OPEC; however, despite Saudi insistence to the contrary, the U.S. shale boom, increased Russian oil production, and a very resolute Iran are challenging this leadership.
The result is that Saudi Arabia now finds itself powerless in supporting oil prices. Instead of the much-needed production cuts, during the 4 December 2015 meeting, the OPEC nations refused to adhere to any ceiling, which has been the practice for years.
2. Burning through reserves—fast
(Click to enlarge)
Source: www.tradingeconomics.com
Iran is waiting for the lifting of sanctions, expected sometime in 2016, to pump more oil to improve its economy, whereas the Saudi’s are losing they are burning through their cash reserves quickly. The above chart speaks for itself, depicting the kind of damage low oil prices are inflicting on Saudi reserves. By the most optimistic opinion, Saudi Arabia can survive low oil prices only for four years.
3. Iran has assumed a very significant leadership role among Shia Arabs
Both Iran and Saudi Arabia are currently locked in a bitter proxy war on two fronts: Syria and Yemen.
Iran has the support of Hezbollah in Lebanon, along with support from the majority of Shiites in Iraq. More to the point, Iran has even managed to grow its Shiite support base among Sunni-ruled nations. The execution of Shia Sheikh Nimr Al-Nimr by the Saudis is an indirect acceptance of the growing influence of Iran among the suppressed 15 percent Shiite population in Saudi Arabia. This shows that the Saudi leadership is feeling threatened on their own soil.
4. Saudi Arabia cannot defeat Iran in a direct war
Iran is a much larger nation than Saudi Arabia by population and has held its own in numerous long wars. By comparison, the Saudis have an army that is inexperienced, led by loyalists of the Royal family who occupy plum postings. These are not the war-hardened generals of Iran.
While Saudi Arabia has a nice arsenal with the latest weaponry, the kingdom is heavily dependent on the West for its use and maintenance. Its indecisive and ineffective handling of three conflict fronts—Iraq, Syria, and Yemen—give us no confidence in its ability to take on Iran.
5. Saudi Arabia knows it won’t have U.S. support for a direct war with Iran
The painfully misguided wars in Iraq and Afghanistan are enough to deter the current U.S. administration from entering into full-fledged war in the Syrian and Yemen theaters. Washington’s non-committal stance, along with efforts to broker a deal with Iran, should serve as very loud signals to Saudi Arabia. The message to the kingdom is this: Don’t go to war with the hope that that U.S. will support you. And without the West, Saudi Arabia knows it stands no chance of winning a war against Iran. The royal family will probably not take the risk of losing power by indulging in such a war.
These relationships are anything but clear, and everything about balance. So the U.S. will continue to sell weapons to Saudi Arabia to allow it to maintain a bit of balance—with the latest deal approved in October—and Washington and Tehran will continue to play cat and mouse as they near a nuclear deal and a removal of sanctions. This is best illustrated by the recent detainment and then quick release of U.S. sailors for an incursion into Iranian waters, and the statement and then denial by Iran that it had completely closed off a key nuclear reactor that would have sealed the nuclear deal.
The Saudis are in a state of panic all around – from its OPEC status and dwindling reserves to its proxy wars that absolutely cannot turn into full-fledged wars and its growing friendlessness. The fact that oil fell briefly below $30 a barrel on Tuesday for the first time in 12 years won’t have helped.
At the end of the day, Saudi Arabia has overextended itself, and overestimated its prowess and it does not have the clout that it once had to be able to do this effectively.
If you’re wondering whether there will be an all-out war between Saudi Arabia and Iran, it’s unlikely. At this point, the Saudis are likely to continue the proxy war and hope that the Iranians do something foolish to upset the nuclear deal with the West. Until then, Saudi Arabia will make a lot of noise and attempt subversive activities, but nothing more.
68 Comments on "Saudi Arabia: A Weak Kingdom On Its Knees?"
onlooker on Sat, 16th Jan 2016 2:19 am
haha, Greg you seem to be talking like Yoda from Star Wars, inverting the sentence. You are a wise man. haha.
theedrich on Sat, 16th Jan 2016 2:52 am
The “divide-and-conquer” policy of the Council on Foreign Relations is failing, because there is little left to divide. The low-IQ Saudis are very good at parasitism, but only because they accidentally control the Ghawar and neighboring fields. Now that depletion and war are revealing their inability to do anything, not even the Pentagon’s profitable sale of all the latest weaponry is getting them anywhere. All they can do is ship their human trash to Europe and America, where bottomlessly corrupt politicians accept it as adding to the “strength” of decreasingly White nations. The sooner the camel drivers of Araby disappear from the map, the more stable the Near East will be.
shafeeq Hassan on Sat, 16th Jan 2016 5:59 am
An excellent, analytical article with foresight. Its sui generis ! Shafeeq
shafeeq Hassan on Sat, 16th Jan 2016 6:01 am
An excellent article
JuanP on Sat, 16th Jan 2016 6:07 am
Boat “The US is not an enemy of Russia.” That has to be the most stupid and ignorant thing of all the stupid, ignorant things you post here regularly. The USA is the enemy of the whole world, all of humanity, and life on Earth as we know it.
Only delusional assholes like you and the cowardly American exceptionalist one percenter board bully living in denial think otherwise.
paul on Sat, 16th Jan 2016 6:15 am
So can Saudi keep oil production up at current levels for a long duration? If most of the oil is located geographically in the Shia minority areas, why would the leadership overtly make missteps by executing a cleric
hamed on Sat, 16th Jan 2016 11:08 am
The writer of this article is either an Iranian or a stupid who does not know what he is talking about.
Boat on Sat, 16th Jan 2016 11:47 am
JuanP,
Most Americans don’t give a shyt about Russia or China. We are to busy living our own lives, taking care of our children, our houses and cars. I am sorry you feel so powerless against what we consider common sense. Must be frustrating.
Apneaman on Sat, 16th Jan 2016 12:26 pm
Boat, y’all doing a bang up job taking care of the children.
Flint Poison Water: Thousands Of Flint Children Poisoned By Lead In Water Supply.
http://www.inquisitr.com/2712897/flint-poison-water-thousands-of-flint-children-poisoned-by-lead-in-water-supply/
Child poverty in the U.S. is among the worst in the developed world
https://www.washingtonpost.com/news/wonk/wp/2014/10/29/child-poverty-in-the-u-s-is-among-the-worst-in-the-developed-world/
Number Of Homeless Children In America Surges To All-Time High: Report
http://www.huffingtonpost.com/2014/11/17/child-homelessless-us_n_6169994.html
Apneaman on Sat, 16th Jan 2016 12:31 pm
Good looking out, Boat.
Severe childhood obesity on the rise in U.S., study shows
http://www.cbsnews.com/news/in-the-us-childhood-obesity-is-a-heavy-burden/
1 in 12 teens have attempted suicide: report
CDC finds suicide among high school students on the rise
http://www.nydailynews.com/life-style/health/1-12-teens-attempted-suicide-report-article-1.1092622
JuanP on Sat, 16th Jan 2016 12:49 pm
Boat, If you think for one second that I don’t know that most people, not just Americans, don’t give a shyt about other people in general, you don’t understand where I’m coming from.
The American government, which was elected by the American people and represents them is actively engaged in illegal criminal acts of aggression, theft, war and terrorism across the planet. It is your government, not mine, but of course I know selfish pricks like you don’t give a fuck.
Why do you think the world is the way it is, irreversibly fucked up? Because we are mostly selfish pricks, that is the rule everywhere, not just in the USA.
onlooker on Sat, 16th Jan 2016 12:52 pm
Yes Juan “Why do you think the world is the way it is, irreversibly fucked up? Because we are mostly selfish pricks, that is the rule everywhere, not just in the USA.” It really is like that song by Michael Jackson “the Man in the Mirror” We all have to look at the mirror every once in awhile.
Boat on Sat, 16th Jan 2016 1:31 pm
JaunP,
Boat, If you think for one second that I don’t know that most people, not just Americans, don’t give a shyt about other people in general, you don’t understand where I’m coming from.
Of course I don’t know where your coming from. Humans have always been in competition. They have always fought and looked to protect their own interests. Life has never been fair to all regardless of any system humans have devised. Who knows and who cares what goes on in that mind of your other than you obviously have anger management issues. A normal trait for doomers it seems. The world is lucky to have the US as it’s leader.
You should move to Russia or China so you have less farther to fall when the crash comes. LOL
Apneaman on Sat, 16th Jan 2016 1:45 pm
Boat says 3rd world America leads the way.
Six Ways America Is Like a Third-World Country
Our society lags behind the rest of the developed world in education, health care, violence and more
http://www.rollingstone.com/politics/news/six-ways-america-is-like-a-third-world-country-20140305
onlooker on Sat, 16th Jan 2016 1:54 pm
Yeah AP, American apologists sure are scrambling trying to find ways to defend the Empire in its waning days.
dn32844 on Sat, 16th Jan 2016 2:39 pm
Is this the same kingdom that Anglo/America governments created to censure flow of Arabia’s “OIL” to western oil companies and share the money with western weapon makers? Foe over 70 years Al-Saud family divide the money among family and 50,000 of their tribes while leaving the rest empty handed. Funny part is last year they became so cocky to start oil war with creator of their monarchy. Well, what you get is result of being ungrateful to those who created your kingdom. Now you can go and pack your suitcases.
GregT on Sat, 16th Jan 2016 2:42 pm
“The world is lucky to have the US as it’s leader.”
Without a doubt the most moronic statement you’ve come up with yet Boat. You’ve set a new, even lower bar for yourself.
onlooker on Sat, 16th Jan 2016 2:57 pm
“The world is unlucky to have the US as it’s tormentor.” Fixed that for you.