Saudi King Abdullah Dies At A Critical Time In The Middle East

Saudi King bin Adbul Aziz has died at 90 years of age.His death was announced on Saudi state TV by a presenter who said the king died at 1 a.m. on Friday, local time.

His death came at a critical time in the region and could set off a major succession battle among the Saudi royals that could affect U.S. policy in the region.

Abdullah was a key figure in both the Sunni alliance against Shi'te Iran and western efforts against Islamic State.More importantly, in spite of major disagreements with the Obama Administration over Iran and other issues, he kept the status quo going in OPEC of keeping oil trades delineated in U.S. dollars.

King Abdullah is going to be succeeded on the throne by his brother, Crown Prince Salman. Essentially, that puts the leadership of America's most important relationship in the Arab world in the hands of a 79-year old in poor health and who reportedly suffers from dementia.

 

What that means is a likely power struggle among the Saudi royals at some point, especially since the crown prince is likely going to be regent for the ailing Salman.

King Abdullah obtained power in exactly this way. His predecessor, King Fahd, had a debilitating stroke in 1995 and Abdullah, as crown prince, assumed most of his duties and responsibilities, running the country as regent until Fahd’s death in 2005.


By Saudi tradition, the King is chosen from among the sons of the first King Adbulaziz bin Saud, who died in 1953. Salman is the sixth son of Abdulaziz and few if any of Abdulaziz's remaining sons are either healthy enough or competent enough to rule in the event of Salman's death or incapacity.

Recognizing this, Abdullah took the step last year of naming his own alternative heir, 69-year-old Prince Muqrin, his youngest brother who is also director general of Saudi Arabia's intelligence agency Al Mukhabarat Al A'amah.This defied the tradition of each new king picking his own heir, which didn't sit well with many of the members of the Saudi royals,particularly a powerful clique of princes known as the “Sudairi Seven,” all sons of Abdul Aziz and his favorite wife, Hassa bint Ahmed. Among other things, Muqrin's mother was a Yemenite concubine, not a Saudi, and Abdullah's action was seen as trying to pre-empt Salman choosing his own heir so Abdullah could advance his own faction.

 

King Salman has already named Prince Muqrin as his official heir and elevated him to the position of Crown Prince and regent. But what after that? It's not clear who in the next generation would take power after him, or when that question would need to be addressed.

Saudi Arabia is now in a state of flux. While Abdullah contributed  to the country's stability by diversifying its economy  to a degree,building up its armed forces and pushing certain mild reforms, the country faces foreign policy challenges from Iran and Islamic state and internal ones that could end up being even more serious.

While its leaders may be elderly, its population is quite young. Almost two thirds of its citizens are below the age of 30, and the Saudi practice of importing cheap foreign labor means many of them have no jobs. For years, this has been offset with subsidies provided by the Saudi oil wealth, but plummeting oil prices along with the need to spend more on self defense could to cut into the funds available for that severely.

There's also the growing problem of Saudi Arabia's Shi'ite underclass. This population is mainly situated in the country's northeast, where most of Saudi Arabia's oil is located, and just across the Persian Gulf from Iran. And as you can imagine, Iran has been agitating this population for some time. That's also something the KSA has been kicking down the road for some time that needs to be dealt with.

And what about oil?

King Abdullah's policy lately has been to take short term losses for long term gains. His reaction to increased  oil production in the U.S. due to fracking and increased use of privately owned oil land was not to cut production in the hopes of prices stabilizing or even rising but to increase it,causing prices to drop still further.

This wily strategy caused some short term pain in the KSA and other GEC countries, but they had the financial depth to ride things out. And it produced a two fold benefit. First, it severely weakened both the Iranians, who lack that financial depth and IS, a big chunk of whose revenues depend on smuggled oil.

And second, it is already causing manufacturers in America to cut back on production and rely again on the cheaper imported oil.

I would expect King Salman and Price Mubrik to continue that policy, since it's working...but enjoy the cheaper gas prices while you can.