Saudi Arabia: A Weak Kingdom On Its Knees?
Submitted by Tom Kool via OilPrice.com,
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.
(14 votes)
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EU can help by taking money to build all those mosques and then using it to deport invaders.
Speaking of "Weak Kingdoms"...
Does this mean that Israel will also be obligated to remove all of there "non-conventional" ordnance from it's Embassy there as well?...
And if they do... Perhaps this is an opportune time for rest of the World that is unfortunate enough to have Israel's Ambassador(s) and "Embassies" in their host Countries to send them home for good!
Too bad POTUS didn't have the guts with those raisin sized nuts for testicle(s) (assuming he even has a pair) to follow up on that announcement he made on March 24, 2014 in the State of the Union Address that he will be throwing out the Israeli Ambassador to the U.S. along with the well planted "toys" in Manhattan and elsewhere within CONUS?!!!
Yeah the few million Jews are the entire problem in the Middle East. Aren't you missing a Teen Nick show?
Aren't you missing a Teen Nick show?
You mean like these kids? Those "starving artists" were so young!
There is no Israeli embassy in Saudi. Saudi Arabia doesn't officially recognize the State of Israel.
Saudi is not above informally asking Israel's help with keeping Iran contained from time to time. That doesn't make them friends, though, except in the narrow sense that an Arab defines friends---namely his enemies' enemies.
I dunno. Four years is a long time to make your competitors sweat.
By then, the Russian Ruble will have pictures of Robert Mugabe on the front of the bills.
On the other hand, putting his picture on the Venezuelan Bolivar would probably be interpreted as a sign of hope.
A very high-stakes game with Russia and Saudi Arabia both upping their expensive military adventures rather than retrenching and trying to ride the storm out.
People might think about taking their petro savings and socking it into solar panels and wind generators. Eventually, one or more of these players will break and the price will go back up. Having an alternative in place that was purchased with the profits from their klepto wars would be sweet justice indeed.
Tara luv you're showing your envy for the Man. Putin's got ALL the bases covered. You're not stoopid so stop playing silly buggers. It's all over bar the dying.
Tara a.k.a. "Cunt of Reason" is pissed off simply because that money he sank into the beach front property in Mariupol is fast fading down wind into a lost investment along with his money manager Darth Soros dream of control in that neighborhood.
As POTUS said in the SOTU...
The American military is not very good at being the World's terrorist enforcer I mean "policeman"! And they can't seem to get any more volunteers for more mayhem and chaos since 9/11 and they need another major event to rally the troops through NATO in Eastern Europe towards a nuclear option on there own border(s) and to get those pesky Ruskies out of Syria for good...
If only there wasn't an internet and the masses could be kept as stupid as they were in WWII???...
You Zionist(s) "The eyes are always bigger than the stomach"!!!
How about you learn some facts about Russian economy before peddling your crap? Lol Zimbabawe situation isnt looming on Russia.
You forget Russia is capable of feeding herself. Arabia is a howling desert that before oil was found was no more than sparsely populated.
The Saudi population long ago surpassed the level it could possibly feed. Once Arabia runs out of oil, the Arabs face mass starvation. Forgive me for not wishing them the best of British luck finding a country that will give them asylum then. Once the oil money is gone even the banksters won't give the Arabs the steam off their piss.
'specially with the annexation of the "breadbasket of Europe", Ukraine.
Conquest, baby!
I've said it before "Hussein" is a Shia name- Obama is no friend of Saudi Sunnis- and they know it.
Yooz jealous Sodomy Arab chair human rights! Thank fuck humans have no fucking rights or we'd all be fooked.
The hoos of Saud = PIG SCUM SAVAGES
"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."
You mean how the central banks have been printing money, hoping a miracle will save them. Ha!
If that were all there was to it, I wouldn't worry about Saudi. Uncle Sugar has demonstrated is willingness to support Saudi any way he can militarily and financially---as long as the oil keeps coming.
Saudi's real problem is that they're running out of oil, and when it runs out, they're doomed.
Even before they started dumping oil, Saudi was on track to become a net importer no later than 2030, after which the country would basically be finished as a viable nation-state. Unlike Russia, which has plenty of arable land, Arabia faces mass starvation after 2030, because aside from oil they have no significant sources of the hard currency they need to import food.
Once the oil is gone Saudi's fair-weather friends in Wall Street will have better uses for their Fed-confetti than to prop up the House of Saud any longer, and Uncle Sugar will abandon Arabia to its fate, leaving Israel, Russia and Iran to clean up the mess.
Stupid fucking Dubbya, we should've been friendly with Iran the whole time.
Pt by pt rebuttal for all ZH Iran/Putin luvvers:
1. Saudi's losing OPEC leadership
means USA losing leadership. we know this
2. Burning thru reserves fast
so? they hv plenty. prob is locals already start complaining but
far, far from any massive discontent except expats
3. Iran Shia leadership
Duh. and they hv been keeping their heads down (returning our wayward sailors in 24 hrs? unheard of. ask Jimmy Carter)
4. KSA cannot defeat Iran
and vice versa. so?
5, Saudi's wont hv USA support vs. Iran
Will they hv Israel's? answered that for ya
Imo, not one of TD's stronger pieces. the main thinkthru is less Wahhab influence : GOOD. Bringing IRAN into the int'l fold, releasing the youth / diminishing old hardliners potential :GOOD. Low cost crude net net huge PLUS for world. GOOD. the only few words that rate in this piece are Saudi Arabia will make a lot of noise and attempt subversive activities, but nothing more.