The Demise Of The House of Saud ?

  I have long promised a blog on the Geo-Politics of Oil.I am afraid I got carried away in the research. The current output is far too long for a blog.Nor is it funny, punchy or particularly interesting to most readers.I have attempted to cut it down by removing tables,graphs,statistics and what not.It has morphed into a piece on the future of the Saudi Regime and the Royal Family.It is still too long so I will send it separately as The End of the House of Saud PART I.

       If ANYBODY proves interested in PART I will edit and blog PARTS II & III.

I am sorry but I am something of a nerd on this stuff .If you are not interested in the Politics and Economics of the world’s most important,most widely traded and least dispensable commodity then give this a skip.The oil will still be there when you wake-lots of it,for a very long time.

  In the interim I am putting out this shorter blog as a taster :it's a cut and paste of the intro and the final paragraph of the End of the House of Saud  PART I.This "PART I" Blog will take us from the Arab Oil Embargo after the 1973 Yom Kippur War to Saddam's invasion of Kuwait and The First Gulf War,1991.

  I will give my readers my widely anticipated predictions on the price of crude oil at the end of this initial blog.If you can make a buck--make a buck.

In 1992 George H.W. Bush,despite this first major successful US  military intervention since Viet Nam,the securing of US/Western  Energy supplies and “standing tall” over a reinvigorated Pax Americana, managed to lose the US Presidential election to the governor of Arkansas.The next eight years was a period of prosperity and stability in a post Soviet world.

[Bill never did give Ross Perot that Medal of Freedom. Maybe Hill could rectify the situation. Or maybe the [re]Publicans can forgive him and get him to run again as a third candidate to stop Trump    

                                          —but I digress.]

If after PART I there are sufficient readers still conscious –or claiming to be interested in Saudi oil policy—I will blog the next installment :taking the narrative from 9/11;the disastrous invasion of Iraq;the Shia takeover of post war Iraq; the failed Arab Spring ;the rise of ISIS and Sunni terrorism to match that instigated by Iran;the collapse of Libya, Syria and the Maghreb;the cooling of US/Saudi relations;the Iran nuclear agreement and the confusion in the Saudi elite .

 I will examine the consequences for the Saudi Monarchy of all this and a possible rapprochement between the US and Iran!
           

 The death last year of King Abdullah and the succession of 80 year old Salman comes at a dangerous time for the Saudis.Salman succeeded to the throne as the last of six sons of the kingdom's founder Abdul Aziz ibn Saud.He is believed to suffer from dementia and has allowed his son,30 year old Prince Mohammad ibn Sultan ibn Fahd, to gather enormous powers to himself.Senior technocrats have been retired and the Prince's loyalists promoted.

   This indulgence has caused open friction within the ruling family and great concern to Saudi allies in the USA and Europe.http://www.independent.co.uk/news/world/middle-east/prince-mohammed-bin-salman-naive-arrogant-saudi-prince-is-playing-with-fire-a6804481.html    This piece is worth the read.

More significantly Prince Mohammad seems to have embroiled the Saudi army in a Yemeni quagmire,begun to drain the foreign currency reserves by continuing the low oil price strategy for too long,dissed other members of the family and announced a new economic “vision “.

This vision includes major cuts to fuel and food subsidies, the free welfare state and feather bed employment in the public sector. http://www.economist.com/saudi_interview
He also plans to diversify the economy to be independent from oil exports by 2030.Prince Mohammad claims his plans are predicated on a $30 oil price.

                                               

 My estimates for the cost of the current Saudi budget are north of $65/bbl, the current budget deficit is greater than 15% of GDP.The plan is generally adrift from reality. He has also announced the flotation of 5% of Saudi Aramco on the world’s stock markets. Bonkers, as I will explain anon.

                                                   

The Prince is less the creator of a Saudi existential crisis and more the victim of the internal contradictions of the Saudi State.

The Saudi population is young,well educated and under employed.Many,males,have been educated abroad.The internet and Al Jazeera is widely watched.Some half hearted social reforms have been instigated and the Religious Police have been reined in a little.Women still cannot drive or go to public events without a male family member.Too little too late?

  Last year saw a record number of public executions by beheading.A week rarely passes without news of  an execution,an indictment of a blogger or an academic,or of another example of repression which causes controversy  in the western media.Despite a firm police state, security apparatus there is fear of clandestine activity by Wahhabi extremists and there are reports of unrest in Saudi's Eastern,Shia populated, province.  

                 The collapse of the House of Saud: not today, not tomorrow but inevitably?

                                    Do not expect what follows to be a Jeffersonian Picnic.

                          Blog: The End of The House of Saud Part I will follow ending with:


Saudi Power has peaked.Its pursuit of  oil market control through increased output and low prices has cost it more and gone on longer than they expected.It has certainly damaged its enemies and reminded the world of its power but the Saudis have not received the appreciation from the West that they may have expected.

The sons of Fahd kept the control of the the state through assiduously providing massive subsidies and services;police repression and the maintenance of a strict religious and cultural orthodoxy supported by the population.This dying generation may have bequeathed  a much more volatile future to its children. 

  The next generation of the family may not enjoy the same level of support from a now more educated population with access to the internet,international media and expectations of more freedom--personal and political.All mixed in with a major rump of continued Wahhabi fundamentalism,friction with its own Shia minority ,turmoil and unrest amongst all its neighbours and distaste from its western allies.

The oil weapon is as vital as ever for the survival of the Saudi regime.
  
Saudi funding and support of the Taliban, the Pakistani Security Services and  Wahhabi activism may have sown the devil’s seeds.The victory of the Taliban in 1996 was seen as a Saudi triumph.The subsequent  incubation of Wahhabist Al Qaeda,led by the Scion of a wealthy Saudi family,may come to be seen as the start of events leading to the fall of the House of Saud.