The news photo I labeled the scariest of 2014, back in August, and the news story I called the worst of 2015 a few weeks ago, just got scarier, and worse. The photo was of demonstrators who have managed to keep an insurgency alive in the Eastern Province of Saudi Arabia for three years despite everything a boundlessly wealthy state can do to snuff it out. Bad for us, because the Eastern Province is where the Saudi oil is. The worst news of the year for us was that the Saudi king was in hospital with a terminal illness. Now the king is dead, and the difficulties faced by his successor just became worse by at least an order of magnitude.
Why do we care? Because if Saudi Arabia becomes another Libya or another Iraq, unable to get a large portion of its its oil to market because of internal strife, or invasion, or some other sort of breakdown, we Americans will suffer. Those who remember the oil shocks of the 1970s, that rocked this country to its foundations, should recall that our oil imports were only reduced by about 10%. The current meltdown in oil prices seems to have been caused by an excess of only two per cent of world supply over world demand. Small changes in oil markets, especially in these the last days of oil, have very large results. And Saudi Arabian oil is not small. The country pumps about 10 million barrels of crude oil per day, eight million of which it exports. Of that, America buys a million barrels a day. We can’t leave home without it.
The transition of power to the new Saudi king has been untroubled, but it is the next transition — he is 79 years old and is rumored to have some problems with dementia — that could get ugly. King Salman is the last of the 45 sons of the original King Saud, and the next transition will be to a member of the next generation, of which hundreds of people will believe they have some reason to aspire to power.
Whoever sits on the throne, under whatever circumstances, is going to have, at best, a very rough several years. Saudi production of crude oil, its only source of income, has been virtually flat since 2005. Meanwhile its population is growing and demanding more and more cheap gas (subsidized by the government, it costs drivers 16 cents per liter), air conditioning, electricity, fresh water, cars and stuff. With the population consuming an ever larger proportion of its oil (among other things, they burn crude oil to generate electricity) the amount of money coming in to pay the government’s expenses — such as those gas subsidies — is steadily declining. The Saudis are rich, but not infinitely so, and these trends have to be dealt with.
What the Saudis fear in the long term is running short of oil and thus money, but in the short term they are terrified of the shadow of the Arab Spring that took down the rulers of Libya, Egypt and Algeria, and the implacable hostility of Shia-majority Iran, which may or may not be contemplating the building of a nuclear weapon (the Saudis are on the Sunni side of the Muslim street).
Now there’s a new source of fear if not panic: the government of Yemen has collapsed and the southern Saudi border, once secure in the hands of an ally of both them and the U.S., is now exposed to the Houthis, the Shia rebels who brought down the government; Al Qaeda in the Arabian Peninsula (sponsor of the recent terror attack in Paris); and now ISIS as well, all organizations that have demonstrated that if they can’t rule the world they will happily burn it down.
So with Iraq to the north (not to mention Israel, and let’s not), Yemen to the south, Iran just across the Persian Gulf to the east and Egypt disintegrating on the other side of the Red Sea to the west, it’s not a great time to be a Saudi. And not a great time to live in a country that depends utterly on Saudi peace, stability, success and oil.