Saudi Arabia and Iraq: Oil, Religion, and an Enduring Rivalry

Published: 
January 1, 2006
By: 
Joseph McMillan

This Special Report is third in a series on "Iraq and Its Neighbors," examining the U.S. relationship with Saudi Arabia and Riyadh's policies toward Baghdad.

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.

January 1, 2006
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