Wednesday, May 21, 2008

Oil and the Saudis

On Friday, President George W. Bush traveled to Saudi Arabia from Israel to meet with King Abdullah and commemorate the 75th anniversary of diplomatic relations between Washington and Riyadh.

Saudi Arabia is probably the only country in the world named after the family that controls it. Abdul Aziz ibn Saud headed the puritanical Wahhabi movement, which founded the country in 1932. Oil was discovered in 1936. Commercial production began two years later.
The Saudis have come a long way from the days, after the 1973 Yom Kippur War, when they orchestrated the 1973 Arab oil embargo; and 1979, when they opposed Egypt's peace treaty with Israel.

Some of the changes are traceable to the regime's battle with homegrown fanatics, for instance, the November 1979 assault by dissident Wahhabis on Mecca's Great Mosque. Riyadh-born Osama bin Laden openly broke with the king in August 1995 - not over "Palestine," as he claimed in a Web posting Friday, but because of the royal family's profligacy, perceived religious hypocrisy and what he saw as the galling presence of "filthy Crusaders" - aka US troops - on Arabian holy land.

Since 1979 and the overthrow of the Shah, the Saudis have also faced an ever-growing threat from Iran. From their perch across the Gulf, the Persian Shi'ites view the Sunni Arab custodians of Mecca with theological and political disdain.

The historic March 2007 visit to Riyadh by Mahmoud Ahmadinejad notwithstanding, tensions between the two countries have hardly abated. Last week Prince Faisal, the Saudi foreign minister, accused Iran of staging a coup in Lebanon which would affect Teheran's relations with the Arab and Islamic world. And next month, former Iranian president Ali Rafsanjani, an Ahmadinejad critic, is expected to visit the kingdom.

WE DO not know what Bush and Abdullah talked about during their time at the king's horse farm outside Riyadh, but we can guess it was mostly oil and Iran.

The White House announced a series of agreements on energy, civilian nuclear cooperation, nonproliferation and the fight against global terrorism. Not much was said about Bush's plans to push through Congress a $1.4 billion arms sale to the kingdom.

The Saudis, the world's biggest oil exporter, agreed to sell an additional 300,000 barrels per day, raising their daily output to 9.45 million barrels; Bush responded that the Saudi move wouldn't solve the problem of skyrocketing oil prices.

He was right in saying that America's energy problem would be ameliorated only when domestic exploration increased and refining capacity expanded; when alternative energy sources were better developed, when conservation was robustly pursued and safe nuclear energy promoted.
Meanwhile, oil stands at $128 a barrel. US consumers are paying $4 a gallon. Of course, we Israelis pay substantially more - roughly $7 a gallon (or about NIS 6.58 a liter).

While energy costs are not solely to blame, oil prices have been slowing consumption and putting a drag on the world's economy. America is in a recession, unemployment is up. In Israel, the April cost-of-living index jumped 1.5%, the highest in six years. Annual inflation stands at 5%.

GONE ARE the days when the Saudis could singlehandedly bring down oil prices and solve such problems. Nor can we expect them to contain Iran by themselves. Still, they could be far more helpful on Lebanon, Hamas and Arab-Israel relations.

Israel's have applauded Saudi efforts to tear down the edifice of religious justification for Muslim terrorism. And the king is to be applauded for recently launching an interfaith dialogue among monotheistic religions. But what good are such efforts if representatives from Israel are not invited to participate.

With Lebanon's rivals meeting in Qatar, I'd like to see the Saudis leveraging their clout within the Arab League, against Hizbullah. And with Hamas again seeking a rapprochement with Fatah, the Saudis should insist the League embrace the Quartet's conditions for including Hamas in the Palestinian Authority.

Of course, the Saudis still need to overhaul their own fundamentally flawed 2002 peace plan to make it a genuine starting point for improving Arab-Israel relations.

Given the regime's origins, it is ironic that the inheritors of Wahhabism are today uniquely positioned to help bridge the civilizational gap between Islam and the West.

Failing to do so will ultimately cost them, and us all, dear.

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