Oil Sheik-Down: Saudi Arabia's Struggle to Contain Iran

Article excerpt

Indian Prime Minister Manmohan Singh's recent visit to the Kingdom of Saudi Arabia culminated in the March 2010 signing of the Riyadh Declaration, through which he and Saudi King Abdullah bin Abdulazizal-Saud agreed to a far-reaching expansion of bilateral relations. Building on the Delhi Declaration of 2006, Singh's visit resulted in agreements promising increased security cooperation, joint research and development initiatives, and reciprocal extradition policies.

Yet it is Riyadh's February 2010 decision to nearly double crude oil shipments to India that reveals Saudi Arabia's true strategic interests in Asia. The Kingdom, already the largest supplier of oil to China and India, is building new refineries and increasing exports with the aim of strengthening political and economic ties with Asia's growing economic giants. These petropolitical partnerships are key to Saudi Arabia's efforts to contain Iran's political influence and military growth, especially its nuclear program. Through oil diplomacy, Saudi Arabia hopes to sap Iran of important regional partners, a diplomatic coup the United States and other Western nations have so far failed to achieve. Despite Saudi Arabia's considerable economic clout, geopolitical constraints, and the economic incentives facing China and India present considerable obstacles to this ambitious foreign policy goal.

Though Israel and the Western world are deeply concerned about Iran's nuclear development goals, the Gulf states of the Middle East, especially Saudi Arabia, may have the most to fear from Tehran's ambitions. The mere presence of an Iranian bomb would strengthen Iran's clout in the Middle East, potentially stirring up Saudi Arabia's restive Shia minorities and strengthening radical groups such as Hezbollah and the Islamic Brotherhood that the Kingdom considers both political dangers and terrorist threats. Iran's growing military presence on the Persian Gulf and the historic tensions between Arabs and Persians also contribute to the Saudis' fears of Iranian dominance. To Riyadh, a nuclear-armed Iran would truly be, as US President Barack Obama has put it, a game changer--if not a checkmate.

The most plausible threat to Iran's nuclear ambitions would be harsh UN sanctions designed to stymie Iran's energy sector and incite domestic unrest. Though the United States and other Western nations have pushed for such sanctions for years, Iran has successfully used its clout as the world's second largest oil producer to fend them off. Iran is China's third largest oil supplier, and Beijing has invested billions of dollars in developing Iranian oil fields. The Chinese government, which has veto power over any UN Security Council resolution, is reluctant to alienate such an important economic partner. India, a rising power player in Asia despite its lack of a permanent UN Security Council seat, has also invested much in Iran's energy sector; an agreement on a US$7.4 billion Iran-Pakistan-India oil pipeline is nearing completion after more than 10 years of negotiation. This project and similar ventures could provide Iran with regional clout indefinitely.

Saudi Arabia, the only country that produces more oil than Iran, is determined to eliminate Iran's geopolitical trump card. At the urging of US Secretary of State Hillary Clinton, Saudi Foreign Minister Prince Saudal-Faisal has assured China that the Kingdom will meet China's energy needs if it stops importing oil from Iran, and has attempted to convince Beijing that a nuclear-armed Iran will foment instability throughout the Middle East. …