Iranian and Saudi Competition in the Gulf

       Saudi Arabia and the United States may not share the same political system and culture, but they do share broad strategic interests. Both countries must now deal with Iran in context of the arc of political instability that extends from Pakistan to Morocco—and is of critical importance to Gulf stability, Gulf oil exports, and security of the global economy. For both countries, this arc presents new sources of competition with Iran that plays out in Bahrain, Iraq, Lebanon, Syria, Yemen and other key countries in the region.

 

       Saudi Arabia, a Sunni nation, has seen a predominantly Shiite Iran as a threat since the 1979 Iranian revolution. Both countries view themselves as leaders of rival religious sects, and they compete to promote their brands of Islam.  Saudi Arabia briefly clashed with Iran during the 1980-1988 Iran-Iraq War, and Riyadh has since structured much of its military build-up and strategic partnership with United States around its desire to contain and deter Tehran. 

 

        But Bahrain’s political crisis has further enflamed competition since Saudi Arabia dispatched troops in March to support Bahrain’s ruling al Khalifa family and its Sunni elite over the Shiite majority. The tiny island nation is too close to the kingdom’s mainland, its key oil facilities and tanker routes for Saudi Arabia--and the United States--to accept Iranian influence or Shiite control in Bahrain. Saudi Arabia built the King Fahd causeway between Bahrain and the Saudi mainland largely to ensure the island’s security against internal upheavals or Iranian threats.

 

       For decades, Saudi Arabia has also supplied Bahrain’s refinery with 85 percent of its oil. The two countries share output produced from the offshore Abu Safa oil field. Bahrain gets most of the benefits, while Saudi Arabia controls the field.

 

       The problem for Saudi Arabia and, in turn, the United States is that Bahrain’s ruling al Khalifa family has failed to offer serious reform and equality.  The king and the crown prince have talked about political openings, but they have not dealt with problems created by aging Prime Minister Salman bin Khalifa, who has been in office for four decades, and other members of Bahrain’s Sunni elite. This faction is largely responsible for Sunni-Shiite tensions and for allowing foreign labor to deprive many native Bahrainis, especially Shiites, of jobs. U.S. intelligence estimates that some 44 percent of the population aged 15 to 44 is foreign. Both Saudi Arabia and the United States recognize that repression is, at best, a temporary substitute for real reform.

 

       Tensions between Riyadh and Tehran are complicated by demands for reform in Saudi Arabia and its own sectarian divisions. The kingdom is particularly concerned about a potential Iranian effort to exploit the Shiite minority in its own oil-rich Eastern Province. It is unclear how serious this threat really is and how active Iran has been beyond occasional rhetoric. Shiites in the Eastern Province are estimated to number between 1.1 million and 2.5 million, although the lower range of estimates seems more likely. Saudi Arabia has spent some three decades building up the Sunni population in the province and ensuring that Sunni workers dominate in the petroleum sector. Moreover, Saudi Shiites are Arab and have not shown much support for predominantly Persian Iran or its concept of a supreme religious leader.

 

       Saudi Arabia and its American allies are also concerned about Iran’s ties to Syria and Lebanon as well its efforts to expand influence in Iraq as a key part of a new “Shiite axis.” On these issues, the new wave of political instability may favor Saudi Arabia. 

 

       Syria has played Saudi Arabia off against Iran since the 1980s.  Damascus sided with Tehran during the Iran-Iraq War, when Saudi Arabia led the Arab world in aligning with Iraq. Syria also facilitated the creation of Hezbollah, a pro-Iran Shiite movement, after Israel’s 1982 invasion of Lebanon. Hezbollah’s influence has grown steadily ever since, in turn altering the political balance between Lebanon’s Shiites and Sunnis in ways that curtailed Saudi influence. Saudi Arabia was particularly uncomfortable about cooperation between Syria and Iran in massive arms transfers that contributed to the war between Israeli and Hezbollah in 2006. Hezbollah is now a dominant force in Lebanon, creating a constant threat of another conflict.

 

       Syria’s current political uprising could affect this rivalry. President Bashar al Assad is an Alawite, an offshoot of Shiite Islam that is a relatively small minority in Syria. If he was forced from power, Syria’s Sunnis would probably make significant political gains. Ironically, however, both Iran and Saudi Arabia would probably rather see President Bashar al Assad stay in power than deal with an unstable Syria.

 

       Any Saudi gains in Syria, however, could be offset by problems in Iraq, Kuwait and Yemen.

 

       In Iraq, new political unrest has brought together rival Shiite politicians, including Prime Minister Nouri al Maliki and firebrand Muqtada al Sadr, who has spent long periods in Iran. The instability has also blocked full implementation of the U.S. Strategic Framework Agreement with Iraq, the key to a partnership to deter Iranian threats and pressure Iraq that ripple deeper into the Gulf.

 

       Kuwait is another strategic buffer between Saudi Arabia and Iran. It is a predominantly Sunni monarchy with a Shiite minority. Two factors-- Iran’s influence over some Kuwaiti Shiites and the emirate’s feuding elite and royal family-- create another potential if more limited threat to Saudi interests. Although Kuwait is small, it provides military bases used by U.S. forces that will become more important if the remaining American combat forces leave Iraq at the end of 2011.

 

       Elsewhere in the Gulf, the petty feuding between Qatar and Saudi Arabia occasionally leads Qatar to support Iran. Qatar, the United Arab Emirates (UAE) and Oman have also had border disputes with Saudi Arabia. The border feuds are not particularly serious, but they do sometimes lead all three countries to sometimes tilt slightly in Iran’s favor. Qatar also shares its main offshore gas fields with Iran so shares strategic and economic interests with Tehran. And Oman is just across the Strait of Hormuz from Iran, which is building up its naval facilities in the Gulf of Oman, east of the Strait. 

 

        In Yemen, Saudi Arabia and the United States agree that Yemeni stability and reform are critical in limiting Iran’s influence and ensuring that al Qaeda in the Arabian Peninsula does not emerge as a more serious threat than al Qaeda in Afghanistan and Pakistan. They disagree, however, over Iran’s role in fomenting either the current political instability or the Houthi rebellion in the north.

 

       These threats are coupled with military risks as well. Iran is anything but a regional superpower. Most of Tehran’s conventional forces are third-rate systems or date back to the Pahlavi monarchy. Iran cannot compete with Saudi Arabia in airpower. Its ground forces have limited power projection capability. And there is no common border. Iran, however, is steadily building up a long-range missile force and moving towards potential nuclear capability. It is steadily building up its capabilities for irregular warfare in the Gulf and the naval branch of its Revolutionary Guards. Saudi Arabia’s navy is still in development, and it relies on U.S. naval and air power based in Bahrain. Saudi Arabia also needs Bahrain to be an ally in maritime, air, and missile defense. So it has the same vital strategic interests in Bahrain as the United States.

 

       In summary, Saudi Arabia and the United States have somewhat different sources of competition with Iran. But they are just as serious and potentially enduring. The current regional instability also makes assessing the future far more complicated—both in politics and the many sides of security.