The Saudi ’turm-oil’
With Saudi Arabia in the firm grip of a political crisis, India and the world must prepare for a steep rise in oil prices.
The Kingdom of Saudi Arabia, synonymous with religious and social conservatism, is shaking and stirring the region. In the past several months, the Kingdom imposed a blockade on Qatar, detained Lebanese Prime Minister Saad Hariri, tightened the blockade around Yemen, declared war against Iran and arrested over two hundred persons during an anti-corruption purge, which included princes, businessmen, and other important officials. The man responsible for this coup, which will have far-reaching implications for the region, is Prince Mohammed Bin Salman (MBS), the 32-year-old heir to the Al Saud throne who in June replaced Mohammad Bin Nayef as the Crown Prince.
MBS has held significant portfolios since 2015, and according to sources, has been groomed to take over since 2012. He is part of the Sudairi clan that began to rule after Ibn Saud, who had declared that his sons would continue to rule after him, died. The seven sons had been born to his favourite wife Hassa Sudairi. After his death, five sons have held power, and King Salman who is now 81, is in all likelihood the last King of the seven sons. In June, Mohammed Bin Nayef (MBN), the son of Nayef, one of King Salman’s brothers, was asked to step down in favour of Salman, who is 20 years younger than him. MBN is a counter-terror head and was head of the National Guard. The change comes after the Saudi’s attempt to organise a coup in Qatar which was stopped by the Americans. Nayef, who was close to the CIA, was unceremoniously dropped, and the allegiance council voted to install Mohammad Bin Salman as the Crown Prince. This political churning has not been seen in the history of the Kingdom since 2015
— two Crown Princes have been deposed.
Mohammed Bin Salman, unlike his other half-brothers, did not study abroad. He studied law at King Saud University in Riyadh and is very close to Crown Prince Zayed of the Arab Emirates. Zayed is said to be MBS’ mentor and is said to be the man making things happen behind the scene. According to reports that have surfaced, Prince Zayed — who is said to have a hand behind the Yemen blockade and the Qatar embargo — orchestrated the elevation of MBS after the US prevented a coup in Qatar against the Emir. When the US found out about the coup in Qatar, they asserted themselves through Nayef, but MBS was elevated as pushback. However, MBS is not inimical to the US or Israel, and since 2012, as several news reports have suggested, he has been meeting officials from the government and Mossad.
Now there is rising political rivalry and regional competition between Iran and Saudi Arabia to increase their influence in the West Asian region. Their involvement in proxy wars in several West Asian countries like Syria, Yemen, Lebanon, Iraq etc have raised the fear of regional instability.
Prince Salman, along with Zayed, is attempting to reshape the Gulf Cooperation Council and with it, the region which they feel is slowly slipping out of the control of the Arabs. Zayed has been focusing on breaking the Muslim Brotherhood in Egypt and his country has also facilitated talks between Russia and the US via a back channel. His power and influence, however, is focused on stemming the growing influence of Iran in the space vacated in the region after the ISIS was defeated. In mentoring MBS, the young crown prince toes the line set by Zayed.
There has been much written on the failure of the Saudi project in the Middle East, their attempts to control Iraq, Syria, Qatar and Yemen. The rise of both the UAE and the Saudi Kingdom comes with support from Americans who used these countries as bases to first counter Saddam and Iran. Zayed, breaking with the past, has allied with Israel, facilitating a sharing of information between them and Saudis.
After Obama’s deal with Iran, both Salman and Zayed are nervous about what the growth of Iran would mean for the region, afraid that the sizeable Shi’a population in their kingdoms would gravitate to a more powerful Iran. Now there is rising political rivalry and regional competition between Iran and Saudi Arabia to increase their influence in the West Asian region. Their involvement in proxy wars in several West Asian countries like Syria, Yemen, Lebanon, Iraq etc have raised the fear of regional instability.
The uproar in the royal family of the Kingdom definitely contributed to raising the temperature of oil price but it is not the only factor behind it. Ever since the churning began, the price of crude has been slowly rising and in the immediate aftermath, it rose by $2. It is expected that the oil price could climb beyond US$70 per barrel by the end of this year which was unthinkable few weeks ago. The Kingdom is the de facto head of the Organisation of Petroleum Exporting Countries (OPEC) and in 2016, they accounted for 13.4 percent of the world’s oil production. Any possible disruption to oil production in the Saudi Kingdom would likely upset the global balance of its supply and demand. Considering its dominant say in the global oil supply, any possible disruption to oil production in the country generally increases the global oil price. The rise is also being anticipated due to the new political development in Saudi Arabia.
India is watching these developments very closely. New Delhi was impressed with the speech the young Crown Prince gave, where he outlined his vision for an Islamic society before the Iran revolution of 1979. India is playing a difficult game, on the one hand, they are getting closer to the Saudis, and on the other, they have considerable investments in Iran. If war is to break out, India would be in a tough spot looking to mend relationships, and will also be faced with rising oil prices.