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April 26, 2002, 8:45 a.m.
The Saudi-Iranian Alliance
United by oil.

By Martin Sieff

audi Arabia and Iran are regional rivals whose traditional approach to the Israel-Palestinian conflict has been diametrically opposite. But now they are moving closer together on that and other issues, with probable immense consequences for the United States and the entire world.



  

Over the past 20 years, Saudi Arabia has been moderate on both global oil prices and in its approach to the Israel-Arab conflict. The Saudis strongly support the Palestinians. But until recently, that support has been low-key. And the Saudis, quietly, strongly supported the Oslo Peace Process over the past decade from its initiation in August-September 1993 to its breakdown after the July 2000 Camp David II summit.

However, these relatively moderate policies have become increasingly hard-line over the past three years because of the replacement of the pro-American King Fahd by the tougher Crown Prince Abdullah bin Abdul Aziz and because of the collapse of the Oslo Process and start of the second Palestinian intifada. Now Saudi and Iranian policies on the Israel-Arab conflict are converging — although the domestic reasons for this are very different in each country.

In Saudi Arabia, supporting the Palestinians is seen as a lightning rod to distract a population feared to be far more radical than its rulers. In Iran, supporting the Palestinians serves the same purpose. But there the aim is distract a population that is believed to be far less radical and hard-line than its leaders.

The Bush administration has consistently wooed Saudi Arabia and turned a blind eye to the two-faced nature of many of its policies. At the same time, it has repeatedly ignored and failed to woo more moderate elements in Iran.

President Bush's now famous — and notorious — inclusion of Iran in an international "axis of evil" in his State of the Union speech this year is widely regarded in Tehran and, indeed, throughout the region, as a crucial turning point. Since then, pro-American sentiments in Tehran have been less enthusiastically expressed and popular feeling has coalesced anew behind a government that, for all its faults, is seen as a representative of the national interest against a potential direct threat from the dominant superpower.

Iran in contrast to Saudi Arabia has always been a hard-line hawk on the Israel-Arab conflict. All through the years of the Oslo Peace Process, its support for the Islamic Shiite fundamentalist Hezbollah, or Party of God, guerrilla group in southern Lebanon never wavered.

Iran has also always been a hawk on setting global oil prices. That is because the Iranians know they do not have the luxury of time to take the long-term view. Their oil reserves are running out and they have to maximize revenues from them as fast as they can. To paraphrase John Maynard Keynes, in the long term, they may not be dead but they will be paupers.

Throughout the 1980s and 90s, the Saudis could afford to take a long-term view of the oil market and allow prices remain relatively low. They did not want to kill the Reagan and Clinton-era economic booms in the United States as these were the driving forces in global economic growth and soaring demand for their product. Therefore during those two decades, Saudi energy and Israel-Palestinian conflict policies were both generally supportive of U.S. interests and initiatives.

In the past few years, however, that has been changing dramatically for a variety of reasons. First, the ailing King Fahd, effective ruler of the Desert Kingdom for nearly a quarter of a century as crown prince under King Khaled and then as monarch in his own right finally had to relinquish the reins of power because of his failing health. His half-brother, Crown Prince Abdullah, took over and has cautiously but steadily followed a policy of strengthening ties to powerful, potentially hostile neighbors like Iraq and Iran while distancing himself from the United States.

Second, in 1999, Crown Prince Abdullah negotiated a radical and ambitious production cutting agreement with Iran to shore up global oil prices. U.S. policymakers and market analysts scoffed. The Organization of Petroleum Exporting Countries was a dead duck, they said. Its old market stranglehold of the 1970s had been rendered obsolete by two decades of new oil fields coming on lien around the world and radically more advanced technology becoming easily available to access them.

Nevertheless, Crown Prince Abdullah's "old-fashioned" and "out-of-date" deal with the Iranians worked. Global oil prices soared by 350 percent in less than two years, though they then fell significantly. But now they are showing signs of rising again.

Third, Crown Prince Abdullah's succession to effective power in Riyadh was followed by the collapse of the Oslo Peace Process in the Camp David Summit and the start of the second, or "al Aksa" Palestinian intifada at the end of September 2001.

Since then, radical pro-Palestinian sentiment throughout the Middle East including Saudi Arabia itself has remorselessly intensified. And under Abdullah's quiet-but-firm direction, Saudi policy and tacit encouragement for tougher policies and public statements has intensified too. The recent Saudi telethon to raise millions of dollars for the families of Palestinian suicide bombers was a dramatic but entirely consistent example of this process. So was Riyadh's striking failure to even pretend to take disciplinary action against the Saudi ambassador to Britain when he published a poem celebrating the slaughter of Israeli civilians, including women and children, by suicide bombers.

The Bush administration has shown itself repeatedly willfully blind to the radical changes taking place in Saudi policy under Crown Prince Abdullah's direction and they have also shown themselves deaf and blind to the prospects of improving relations with Iran offered by President Mohamed Khatami in Tehran. As a result Saudi policies are changing in ways inimical to U.S. interests while Iranian polices are not changing at all.

The global oil crisis of the 1970s was only possible because Saudi Arabia and Iran, the two greatest oil producers in the world, teamed up to enforce their mutual colossal energy clout. The 1979 Iranian Revolution had the paradoxical effect of ensuring 20 years of global economic growth based on cheap oil supplies because the new Iranian rulers were so hostile to the Saudis. But now, for the first time in almost a quarter of a century, Saudi and Iranian policies are converging again.

This is good news for the Palestinians and bad news for the Israelis. It may also prove to be very bad news for the United States and the Bush administration.

— Mr. Sieff is senior news analyst for United Press International. This piece is based on a report for UPI.

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