---

Geopolitical Issues - Saudi Arabia Dominates

By Scott B. MacDonald and Robert Windorf

Oil prices briefly peaked above $42 a barrel on Monday June 1, 2004. The primary driver of the price spike was a violent attack against foreign oil workers in Saudi Arabia over the preceding weekend. In response, OPEC members promptly vowed to increase oil production. Oil prices fell…for now. However, we now have in place the “al-Qaeda oil tax.” Although more oil is to be pumped by OPEC, the threat of terrorist actions against the oil fields and foreign workers needed to work them, leave uncertainty of delivery, hence ongoing upward pressure on prices. We see oil prices at $35 on average for 2004 and $31 for 2005. [Prices are also likely to stay above $30 in 2005 due to the reluctance of the major international oil companies to commit additional capital to major new exploration efforts.]

Saudi Arabia is and will continue to be a critical battleground in the war on international terrorism. With its major Muslim holy places (Mecca and Medina) and the world's greatest oil reserves, Saudi Arabia is the ultimate prize for al-Qaeda. Should the House of Saud fall and be replaced by a new radical fundamentalist regime, the rest of the region will be at heightened risk. It is a historical fact that revolutionary regimes seek to export their revolution - we have seen this with the French, Haitian, Russian, Chinese, Cuban and Iranian revolutions in the past. A potential radical Islamic regime in Saudi Arabia would not be any different, especially considering that much of the current al-Qaeda leadership looks upon the world order as a clash of civilizations, which propels the needs for a large, centralized and militarily well-equipped Islamic state. Consequently, the recent round of attacks in Saudi Arabia should be seen in both the light of international oil politics, as well as the war on terrorism.

Over the weekend of May 29-30, a Saudi group affiliated with al-Qaeda claimed responsibility for the May 29 attacks in Khobar. The attack on foreign residences left 22 civilians dead, 19 of them foreigners (mainly Westerners and Indians). This was the fourth such incident involving suspected Islamist militants in the Kingdom during May. It followed the May 1 attack in Yanbu on an oil installation that left five oil workers dead, the May 20 clash between Saudi security forces and militants near Buraida (in which most of the militants escaped) and the May 22 shooting of a German expatriate in Riyadh. Despite Saudi assurances that al-Qaeda was no longer a force in the Kingdom, Khobar was followed by a new attack on U.S. military personnel on June 2, when gunmen opened fire on two vehicles leaving a military housing compound south of Riyadh. No one was killed.

Khobar is significant for four reasons. First, the attack was a skilled operation, reflecting well-disciplined training and considerable forethought. The attackers wore uniforms to disguise their approach, there was a specific choice of targets (Westerners and Indians), indicating an solid knowledge of the attack sites, and three of the attackers escaped. In addition, the attack was very similar to the earlier Yanbu attack: both assaults were against Western energy company employees, struck several target sites and attackers dragged the body of a victim behind an automobile. This was a calculated and brutal action meant to shock.

Secondly, the assault on the House of Saud has intensified as the terrorist action occurred on the oil rich eastern side of Saudi Arabia. This marks a distinct shift from most previous attacks, which took place along the west coast and in and around Riyadh. As one intelligence service report (Stratfor) notes: "The militants might be sending a message to Saudi authorities -- as well as to foreigners in the kingdom -- that no part of the country is safe from attack. This will add to concerns of foreign firms -- already looking to withdraw personnel and families from Saudi Arabia -- and further strain the already taxed Saudi security forces."
A third point about Khobar, according to Stratfor, is that the attackers went to considerable lengths to clarify they were not out to harm Muslims. In the November 2003 Riyadh apartment complex bombing 12 Arab nationals were among the 17 dead. This led to a public backlash against the attackers. Consequently, the attack was careful to make a difference between Muslims and non-Muslims. At Khobar, Muslims were free to leave; non-Muslims were executed.

The fourth point about Khobar attack is that al-Qaeda or an affiliated group claimed direct responsibility. The House of Saud has been fighting two other more Saudi groups, the Islamic Fighters of the Arabian Peninsula and the Brigades of the Two Holy Mosques. In this case, a message delivered on the jihadunspun.com Web site, the al-Quds Brigades of al-Qaeda in the Arabian Peninsula, claimed responsibility for the group, warning that further attacks were coming. This marked a shift in post-attack tactics by al-Qaeda, and could signal an even more aggressive plan of operations by the al-Qaeda-linked militants in Saudi Arabia. The attack on U.S. servicemen indicates that the fighting is not over.

In the aftermath of the Khobar attack, the Saudi government actively claimed that it had the situation under control and that all al-Qaeda cells in the country were now dismantled. Sadly, the autocratic (and often repressive) nature of the Saudi government, the painful lack of an official opposition, and a lack of transparency all have meant that any opposition groups to the House of Saud, moderate as well as radical, are underground. The country's high unemployment (over 12%), blatant corruption of the ruling family and its cronies, and dependence on foreigners in the economy all add to societal discontent that cannot be swept away by a few words.

This is not to argue that the House of Saud has done its people poorly. As Middle Eastern specialist Milton Viorst observed in 2001: “Whatever its flaws, Saudi Arabia has risen from the desert in a few generations to have prospering cities, efficient communications and transportation systems, state-of-the-art factories and seaports, well-run universities and hospitals.” Despite the concentration of wealth at the top, there has been some spreading of wealth among society and the Saudis as a people are probably the best educated they have ever been. It should also be added that though there is a growing undercurrent of discontent, Saudi Arabia has never been a police state and throughout most of its modern history there has been a high degree of social order. However, that is beginning to change as more Saudis are aware of the inequalities in society and there is an increasing desire for greater accountability on the part of the government.

Along these lines, al-Qaeda and its affiliates have in Saudi Arabia transmitted a powerful message, combining the appeal of social justice with that of radical Islam. Malise Ruthven, author of Islam in the World (1984) provides an important historical context between early Islam and today’s al-Qaeda which is worth noting: “The Prophet of Islam set his followers the impossible task of realizing the ideals of Islam in a violent and wicked world, using the available sources of political power…The utopian aspirations of primordial Islam, though never fully realized, never ceased to activate discontent and to provide the ideological fuel for generations of Muslim revolutionaries.” Although written before the advent of al-Qaeda as a household name, Ruthven captures the issue in Saudi Arabia, the home of two of Islam’s most revered holy places. For a number of Saudis, al-Qaeda’s simplistic and religious message of purity is in stark contrast to the corrupt and repressive House of Saud.

Khobar is not an end of al-Qaeda in Saudi Arabia as stated by the Saudi government, but the beginning of a well-planned escalation of violence. Al-Qaeda is at war with the House of Saud and the West. It is now hitting the House of Saud where it hurts the most - in its pocketbook. We expect that trend to continue.