August 08, 2005

Saudi Re-Shuffles

Aside from Fahd's death and Abdullah's accession to supreme power in Saudi Arabia, there's also been an important change in the ambassadorial ranks in Wash DC. Rachel Bronson, CFR guru on all things Saudi and more besides, has the details:

Q: Two weeks ago, it was quietly announced that Turki al-Faisal was chosen to replace Prince Bandar [bin Sultan], who's been there for years. What's the significance of that?

Bronson: Prince Bandar became Saudi Arabia's ambassador to the United States in 1983. Turki al-Faisal is a controversial figure, although the right choice. He knows the bad guys from Afghanistan, he supported many of them. He knew bin Laden personally. He was the director of Saudi Arabia's general intelligence from 1997 to 2001. He's got dirt on his hands, but he's also very Western-leaning and was one of the Saudis who saw the trouble the religious radicals could cause the Kingdom and the United States long before many of his countrymen. And so while his past makes him controversial, it also makes him potentially very effective. Nobody on this planet knows these guys better than Turki al-Faisal.

He also brings something else. When he became ambassador to the United Kingdom, it was sort of a marginal post, certainly less important than being the chief of intelligence. But he now brings to Washington a fairly good understanding of the second generation of terrorists, the ones born or bred in Europe, often hailing from London. While in England, he was active in trying to "convert" some of the more rabid clerics. He now brings this knowledge to Washington. On the war on terror, which is clearly a major issue for the Bush administration, I think his appointment is a good sign. It also suggests Abdullah is committed to this war, and interestingly, that he's trying to put his own guys into important positions.

On reform--another big issue for the Bush administration--Abdullah as king is also a good sign. As Crown Prince, Abdullah showed himself to be more forward-leaning on reform than some of his brothers. Not as much, in some ways, as Fahd was, but more so than the others. And understanding the need for a little bit more openness, he's instituted the national dialogues--which have been very important. Elections have come under him. The mutaween, the Saudi religious police, have been reigned in, although it seems they're getting more power again. I think in terms of reform, Washington is probably breathing a sigh of relief he's finally king and that he'll have a little more heft to bring to his fights with his brothers in trying to move in that direction. [emphasis added]

Meantime, relations between the U.S. and Kingdom "couldn't be better", say some! In another piece, Rachel sounds slightly more cautionary notes perhaps than in the Q&A above:

"We're in a period of slow recovery," said Rachel Bronson, a Middle East specialist at the Council for Foreign Relations in New York. "The administration is willing to publicly acknowledge they are working with the Saudis on the war on terror. But I don't believe things will ever be the same. You will never have the ease of the intimate relationship that existed in the 1980's."

Perhaps not. But aside from the need for continued cooperation on the war on terror (or GSAVE, or GWOE, or whatever we are calling it these days...), there are other reasons, of course, why the U.S.-Saudi relationship remains so very critical:

"All the countries we thought we could diversify our production away from Saudi Arabia haven't lived up to our expectations," said Amy Myers Jaffe, the associate director of Rice University's energy program in Houston. "We are definitely more dependent on the Saudis, absolutely, than we were before 9/11."

With Iraqi oil production, shall we say, lagging--and relations with Iran (the world's second largest producer) all but certain to remain very troubled over the coming years (not to mention Venezuela)--it's pretty safe to say that this is a dependency that's isn't going away anytime soon. That's not to say, however, that we've been reticent to forcefully broach with our Saudi interlocuters critical terror-related issues on the bilateral agenda, particularly, of course, since 9/11. But it bears keeping in mind that these discussions must always take place within the overarching context of continued U.S. dependency on Saudi oil. That not anybody's fault really, and it's likely not a surprise to anyone reading this, but it's nevertheless worthy of noting amidst the Abdullah succession and the beginning of Turki al-Faisal's Ambassadorship.

From the US Government Country Analysis Briefs:

Saudi Arabia is a key oil supplier to the United States and Europe. Asia (e.g., China, Japan, South Korea, India) now takes around 60 percent of Saudi Arabia's crude oil exports, as well as the majority of its refined petroleum product exports. During the first five months of 2005, Saudi Arabia exported 1.57 million bbl/d of oil (of which 1.51 million bbl/d was crude) to the United States. For this time period, Saudi Arabia ranked fourth (after Canada, Mexico, and Venezuela) as a source of total (crude plus refined products) U.S. oil imports, and third for crude only. Saudi Arabia is eager to maintain and even expand its market share in the United States for a variety of economic and strategic reasons. During the first five months of 2005, Saudi Arabia's share of U.S. crude oil imports was 14.9 percent, up from 13.9 percent during the first five months of 2004.

I don't think the U.S. is alone in dependence on Middle East oil, especially that of Saudi Arabia. It is obviously in the world's best interest for a reformed Middle East to better reduce oil supply volatility. At the same time, the Saudi's must see the U.S. as one

of their most stable customers--in that sense, it is in the Saudi's

interest to increase sales to the U.S.

Posted by: Shawn Beilfuss at August 8, 2005 12:59 PM | Permalink to this comment

I am not sure how we are more dependent on SA than before. We import a far smaller percentage than in past years from the Saudi's. Maybe we are more dependent than in the past than the statistics suggest. If so, can someone enlighten me? Or is this just (despite the seeming credible source) a piece of knee jerk conventional wisdom.

Posted by: Lance at August 8, 2005 09:35 PM | Permalink to this comment

American dependence on Saudi oil has to do with the place Saudi Arabia as a producer occupies in the world market, not with how much it sells directly to the United States.

Saudi Arabia has the world's largest oil reserves, and the largest reserves by far of easily accessible oil. World oil prices could be much higher if Saudi Arabia chose to restrict its production; increases in Saudi production can (and have many times in the past) offset reductions elsewhere to stabilize world oil prices. What the American economy is dependent on is oil at reasonable prices, which the Saudi royal family has ensured for more than twenty years now; what the American economy would suffer most damage from is a sudden large spike in oil prices, which Saudi policy has kept from happening throughout that time. Where the oil we use in this country comes from is ultimately not so important.

Incidentally, Greg is right to suggest that no one in American politics is to blame for our dependence on the Saudis, to the extent that no one in American politics has promoted policies much more likely than those of the Bush administration to reduce that dependence. The one step that would work -- increasing the price of petroleum products through substantial taxation -- is such political poison that no one has promoted anything like it in over a decade. The energy bill recently passed by Congress reflects a strong bipartisan consensus that reducing American dependence on Saudi oil is not worth accepting blame for higher gasoline prices.

Posted by: JEB at August 8, 2005 10:17 PM | Permalink to this comment

The New York Times, assessment of US oil consumption is counteracted here,Even if we were to cut back

on petroluem for fuel, there is still the myriad other derivative

products that we depend on. When are the Kazakh and Azeri

oil fields coming on line. The arrival of Sheik Turki to the US,

, is an improvement over Prince Bandar, (then again the fact

that he was cut out of the loop before September 11th, doesn't

really fill me with confidence His predecessor to the Court of

St James, the suicide bombing poetic hagiographer Al Ghosaibi,

now the Minister of Water, seems to have reverted back to his

reformist routes. It's hard to see how any transition to any of

the Sudairi's whether Prince Sultan, Prince Bandar, or even

the foreign minister Saud Faisal, who would follow n the name

sake of his namesake, if he were to reach the throne, could really

make a difference. Wahhabism is the creed, of Saudi Arabia, and

all likely contenders will be found wanting. It's even more distressing if they found a Prince more to their liking; a younger

version of Prince Nayef

poetics

Posted by: narciso at August 9, 2005 03:12 AM | Permalink to this comment