January 2006 | Special Report No. 157
Joseph McMillan
Saudi Arabia and Iraq: Oil, Religion, and an Enduring Rivalry
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This report is a part of the Iraq and Its Neighbors series.
Summary
- From Operation Desert Storm in 1990 until the U.S. overthrow of the Saddam Hussein
regime in 2003, the Kingdom of Saudi Arabia was the United States’ key Arab partner
in confronting the problems to international stability emanating from Iraq. Over that
decade and more, however, the demands associated with containing Iraq and Saddam
Hussein began to place unprecedented strains on the U.S.-Saudi relationship,
particularly after the terrorist attacks of September 11, 2001, and the run up to the
U.S. invasion. The abnormal situation that bound Saudi Arabia to the United States in
having to face a common threat from Iraq has now given way to a more normal situation
in which the two countries’ interests and approaches toward Iraq will converge
or diverge, depending on the issue concerned.
- Riyadh’s policy toward Baghdad over the next several years will probably be dominated
by four key concerns about the future of Iraq: domestic stability, foreign meddling,
oil production policy, and Iraq’s political evolution (especially the role of the Shia). Of
these, far and away the most important to Riyadh is stability.
- Even if Iraq achieves a stable, legitimate government, it would still be a mistake to
foresee its relations with Saudi Arabia as trouble-free. Ever since the emergence of
the Saudi and Iraqi states in the wake of World War I, relations between the two have
been problematic. The post-Saddam period promises to be another era of bilateral difficulties
over oil policies; the demonstration effect on Saudi Arabia from Iraq’s democratization;
and cross-border religious influence, particularly from Shia in both states
and on Iraq’s Sunni community from Saudi Arabia’s support of Wahhabi propaganda.
- In the near term, the U.S. and Saudi perspectives on Iraq will be quite similar, with both countries tightly focused on restoring peace and order, and preventing the propagation of terrorism spurred by the fighting in Iraq. Beyond that, however, there is ample room for divergence. Saudi Arabia values its ties to Washington, but its ability to cooperate with U.S. policy will be limited by regional and domestic pressures. Riyadh’s attention will frequently be distracted by the bumps and potholes on its own developmental path. Ensuring that Saudi Arabia is a force for stability in the Gulf rather than a source of disruption will be a continuing challenge for U.S. diplomacy.
Conclusion
In the near term, the U.S. and Saudi perspectives on Iraq will be quite similar, with both
countries tightly focused on the restoration of peace and order. Beyond that, however,
there is ample room for divergence, between Riyadh and Washington as well as between
Riyadh and Baghdad. In the best of times, the Saudi-Iraqi relationship has historically
been uneasy; at times, it has been overtly hostile. There is no reason to assume that the
departure of Saddam Hussein will automatically overcome eight decades of distrust.
Saudi Arabia will not welcome and will not assist--but will also be unlikely to interfere with--U.S. efforts to introduce a democratic form of government into Iraq. Saudi
leaders will do their best to live with Shia domination of Iraqi politics, but they will not
like it, and we can expect their discomfort to continue erupting into public view from
time to time. The Saudi public and the traditional establishment are apt to be even less
circumspect in expressing their misgivings. Depending on how the kingdom's own Shia
population responds to political developments north of the border, those misgivings
could find expression through anti-Shiite actions within Saudi Arabia or attempts to
meddle in Iraq by means of the Sunni Arab population, a population that has become
increasingly attuned to its religious identity in the last decade and thus, perhaps, more
susceptible to Wahhabi blandishments.
When American analysts explain why Saudi Arabia is important to the world, two
themes always come to the fore: oil and Islam. Saudi analysts and officials reverse the
order of the two, but oil is nevertheless always near the top of the kingdom's foreign
policy agenda. With demand high and production going full blast, there is no basis for
contention between Saudi Arabia and Iraq over oil policy, but this is a situation that will
not continue forever. Again, it is quite likely that the Saudi interest in moderate prices
and preserving market share will run afoul of the Iraqi need for maximum production at
high prices to fund national reconstruction. The United States may well find itself torn
between its interest in the future of Iraq and demands for cheap energy at home.
Under King Abdullah, Saudi Arabia values its ties to Washington and will go out of its
way to demonstrate willingness to cooperate on matters, such as Iraq, that the United
States considers important. But its ability to cooperate will be limited by regional and
domestic pressures, and its attention will frequently be distracted by the bumps and pot-
holes on its own developmental path. Meanwhile, there will be strong tendencies in the
kingdom, particularly on religious issues, that could make Saudi-Iraqi interactions deeply
troublesome for U.S. strategy. Ensuring that Saudi Arabia is a force for stability in the Gulf
rather than a source of disruption will be a continuing challenge for U.S. diplomacy.
About the Report
Iraq’s neighbors are playing a major role—both positive
and negative—in the stabilization and reconstruction
of “the new Iraq.” As part of the Institute’s “Iraq and
Its Neighbors” project, a group of leading specialists
on the geopolitics of the region and on the domestic
politics of the individual countries is assessing the
interests and influence of the countries surrounding
Iraq. In addition, these specialists are examining how
the situation in Iraq is impacting U.S. bilateral relations
with these countries. Joseph McMillan’s report on Saudi
Arabia is the third in a series of USIP special reports on
“Iraq and Its Neighbors” to be published over the next
few months. The “Iraq and Its Neighbors” project is
directed by Scott Lasensky of USIP’s Center for
Conflict Analysis and Prevention, who is also the author
of the project’s next report on Jordan.
Joseph McMillan is senior research fellow at the
National Defense University’s Institute for National
Strategic Studies. The views expressed are his own
and do not necessarily reflect those of the National
Defense University, the Department of Defense or the
U.S. government. He wishes to thank Rachel Bronson,
Scott Lasensky, Phebe Marr, and Daniel Serwer for their
valuable comments on an earlier draft of this report.
Kerem Levitas of the Institute’s Center for Conflict
Analysis and Prevention provided additional research
for the report.
The views expressed in this report do not necessarily reflect views of the United States Institute of Peace, which does not advocate specific policy positions.
Of Related Interest
A number of other publications from the United States Institute of Peace examine issues related to Iraq and regional security in the broader Middle East.
Among some related USIP reports on Iraq:
- Iraq and Its Neighbors/Iran and Iraq: The Shia Connection, Soft Power, and the Nuclear Factor
by Geoffrey Kemp (Special Report, November 2005)
- Iraq and Neighbors/Turkey and Iraq: The Perils (and Prospects) of Proximity
by Henri J. Barkey (Special Report, July 2005)
- Who Are the Insurgents? Sunni Arab Rebels in Iraq, by Amatzia Baram (Special Report, April 2005)
- Iraq’s Constitutional Process: Shaping a Vision for the Country’s Future, (Special Report, February 2005)
- Promoting Middle East Democracy: European Initiatives, by Mona Yacoubian (Special Report, October 2004)
- Global Terrorism after the Iraq War (Special Report, October 2003)
- Islamist Politics in Iraq after Saddam Hussein, by Graham E. Fuller (Special Report, August 2003)
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