Republican Reference - Area ( 2,149,690 - Population 26,131,703 - Capital Riyadh - Currency Saudi riyal (SAR) - President Abdallah bin Abd al-Aziz Al Saud

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Key Economic Data 
  2012 2009 2008 Ranking(2012)
Millions of US $ 727,300 468,800 468,800 19
GNI per capita
 US $ 18,030 17,700 17,870 57
Ranking is given out of 213 nations - (data from the World Bank)
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The Religious-Political Compromise
The modern state of Saudi Arabia is a kingdom established in 1932 by Abdul-Aziz bin Saud who united a series of fiefdoms covering the largest part of the Arabian Peninsula over the course of a 30-year long process, which began with the capture of Riyadh, the current capital, in 1902. However, the house of Saud's political fortunes started in 1744 when the tribal ruler, Muhammad ibn Saud was joined by the charismatic preacher, the 'salafist' cleric Muhammad abd-al-Wahhab, in a religious-political alliance that lasts until this day, which gave rise to the Saud dynasty. From 1744 to comparatively modern times, the Saud dynasty fought against all comers: Egypt, the Ottoman Empire as well as the tribes and fiefdoms of the Arabian Peninsula. The version of Islam practiced by al-Wahhab was based on the 'salaf', the earliest Muslim ancestors who were the Companions of Muhammad. The salaf are attributed as having given Islam its most authoritative sources such as the Sira (biography of the Prophet), and Hadith (traditions of the prophet). More importantly, the salafist approach rejects the notion that Islam can change or evolve and refutes notions accumulated since the very early and binding precepts of the faith (they hold to the idea of 'jihad' as the sixth pillar - one of Bin Laden's driving principles). 

The Saudi monarchy remains the central institution in the country. In 1992, the Basic Law of Government formalized the succession mechanism such that the monarch would have to be a son or grandson of Abdul Aziz bin Saud. The country's constitution is the Qur'an itself, and the dynasty has encountered fewer internal political setbacks than other countries of the region, giving Saudi Arabia an image of stability, which has also raised its diplomatic prestige. Although, the country has been rocked by bombing attacks in the recent decade, the greatest challenges to its stability came in the 1970's, when the country experienced unprecedented growth as oil prices rose sharply in the wake of the 1973 oil embargo. One of these setbacks was the murder of King Faisal by his nephew, Prince Faisal bin Musa'id, in 1975. King Khalid succeeded until 1982. He was followed by Fahd until 2005 when his half-brother Abdullah, the current king, ascended to the throne. There are no official political parties, and the only elections were held in 2005 at the municipal level. Some commentators, and the US government, tried their best to present these as a first step toward the adoption of some democractic principles, which could even lead to the formation of political parties. However, the high oil prices and increased revenues have enabled Saudi Arabia's generous distributive system to continue, allowing the government to procrastinate on political reform possibilities. 

It is very significant as the 'salafist' or 'Wahhabi' (as it is frequently called - 'salafist' is a better term) origin of the Saud dynasty means that much of its current legitimacy still relies on this religious aspect. Any attempt to modernize society, socially or materially, must have the tacit approval of the religious authorities, or ulama. Saudi rulers have also wielded 'Wahhabism' to their advantage when necessary. The 'jihadist' zeal of the salafists was useful in the al-Saud struggle to unite the Arabian Peninsula against the Ottomans and even their fight with the Hashemites (who for generations controlled the holy places of Mecca and Medina in the Hijaz), and with Yemen in 1934. Therefore, Wahhabism is a necessary element in the political compromise of Saudi Arabia. It has served its purpose as a mobilizing force, while it has also softened its ideological zeal such that in the 1990 (after Iraq invaded Kuwait) the Council of Senior `Ulama issued a fatwa allowing a foreign power, the United States, to defend the country. 

The Potential for Islamist Uprising in Saudi Arabia
The phenomenon of islamist opposition, considering that the very constitution of the Saudi Arabia is informed by an almost literal interpretation of the Qur'an and the Sharia, may seem like a paradox. Nonetheless, a newer and more ardently salafist movement exists, which has challenged the government on its ties to the West and over the corruption of the ruling family. While the official religious establishment, Wahhabist though it claims to be, has come to accept the need for compromise to achieve the Kingdom's political objectives, the 'seceders'- as prince Bandar, at one time Saudi ambassador to the United States, describes them - are criticizing the official ulama as being controlled by the state. 

While, much has been made of the a potential islamist uprising in Saudi Arabia after the events of '9/11', the roots of this drive for a purer or more salafist Islam precede it by more than 20 years. Although the Saudi monarchy has ruled in co-operation with the Wahhabi establishment, this very conservative Muslim sect that originated in Saudi Arabia in the 18th century, it has also witnessed a considerable degree of Islamist unrest. The House of Saud's legitimacy has rested on its ability to pursue development while serving religious interests and organizations. However, the rapid pace of industrial and economic development of Saudi Arabia in recent decades has disrupted traditional social structures and the kingdom has witnessed a conflict over the competing influences of the modernizing West and revolutionary Islamic Iran. In the late '70s a variety of opposition groups emerged in Saudi Arabia that even included a Communist Party (established 1975). The Islamic revolution in Iran, however, inspired common Saudis, and even army officers and members of the royal family, to channel their political grievances through what they may have regarded as a purer form of Islam.

The leaders of the religious revolt urged Saudis to overthrow the King (Khaled in this case), and called for the expulsion of all foreigners from the kingdom. There was public unrest in the Hijaz (the region of Mecca and Medina) in November 1979, only 6 months after the fall of the Shah. The revolt culminated on November 20 when the spiritual leader of the revolt, Juhaiman al-Ataiba, announced the rebellion officially in the name of a purified Islam at the Grand Mosque in Mecca. Juhaiman condemned, in recorded tapes and through the loudspeakers of the Mosque, the royal family's corruption and demanded a return to the values of the first centuries of Islam. The revolt ended inevitably with a storming of the Mosque and the death of 63 rebels. These events of more than 25 years ago may also provide an indication of the possible reaction of ordinary Saudis to the current crisis in the Middle East.

Much has been made of the connection between Al-Qaida and the Saudi government. Osama Bin Laden had official ties to the Saudi royal family through Prince Turki Bin Faisal, the Head of Saudi Intelligence. The latter provided funds to fuel the war, Jihad, against the Soviets in Afghanistan and the madrassas, the religious schools along the Pakistani-Afghan border. They promoted the Wahhabi Islam of the Saudis, which ultimately spawned the Taliban in Afghanistan. More importantly, the active involvement of the Saudis in Afghanistan diffused the tensions of 1979 and served as an outlet for Saudi Arabia's own dissidents, who joined the multinational Islamic force known as the Arab Afghans. The repercussions of the return of the war weary Arab-Afghans to their countries - Osama Bin Laden being their most infamous member - in the '90s destabilized internal politics widely and have accounted for much of the recent political violence in the Arab world. The existence of some friendly elements to Osama Bin Laden within the vast Saudi Royal Family and the intelligence services, remains likely and illustrates the extent of the problem. 

The appeal of radical Islamic alternatives has become more intense in the '90s as the frequent downturns in the Saudi economy produced widespread unemployment among university educated youth. Notably, 150,000 unemployed graduates of religious colleges have demanded the same social justice, wealth re-distribution and government services reforms of their peers throughout the Islamic world. The Gulf War also fueled the rise of Islamist opposition groups, as many Saudis have opposed the presence of foreign troops and women soldiers on Saudi soil and proposed an internal Arab solution to the dispute shortly after Iraq's invasion of Kuwait. Certainly the new monarch, Abdullah, who succeeded Fahd, will face important challenges for Saudi Arabia and the Middle East region as a whole in the next few years - if not months. As with any society that experiences sudden and dramatic economic growth, wealth in Saudi Arabia has been partly re-distributed to citizens through a wide range of benefits such as free health care, education, housing and interest free loans. However, Saudi society is becoming increasingly younger and 60% of citizens are under the age of 20. The fast and sharp population growth means that GDP pro-capita has declined, such that in relative terms Saudi oil revenues were higher in the 1970's than they are now. There are also several million migrant workers with little if any rights, which has created a problem of unemployment or underemployment for citizens as well as fueling security concerns, which persist in spite of the high oil prices of the past few years. Terrorist attacks in the post 9/11 period on its own soil (largely against expatriate housing facilities) have also fueled defense spending. 

There is also a contrarian approach, one that rejects the strictness of the salafists, as even within the official religious establishment (the ulama) there can be differences. For thirty years the Grand Mufti (the leading scholar of the ulama), Abdul-Aziz ibn Baz, granted the royal family favorable rulings in the most critical period of change (mid 1960's to the first Gulf War in 1991), the most controversial of which - from the salafist point of view - was the ruling granting permission to US troops to protect the country in 1990-1991 against the perceived threat from Iraq, after it had invaded Kuwait. Moreover, many among the educated urban classes and the Royal family itself are not especially devout or at least stray significantly from stereotypes of 'commitment' to the faith in western media. The ulama themselves have been co-opted by state salaries, cars and luxurious housing. Those Saudis with sufficient power and influence can close the prying eyes of the piety enforcers by simply banning the religious police from their neighborhoods. In general, the Royal Family has staved off extremist influence by paying it to 'stay away' from its business. In some cases this involves having the various princes support religious schools or charities in exchange for peace or 'a blind eye' toward the perceived debauchery and decadence of the court - a very 'mafia' like relationship. This is one of the aspects that has led to accusations that the Royal family has backed terrorists, including those who attacked the United States on 9/11. 

Relations with Iran
Saudi Arabia and Iran have not had good relations since the Islamic Revolution in 1979 that brought the Ayatollahs to power. The United States had backed the Shah's regime in Iran, which was one of the pillars of the American strategy of containing the Soviet Union in the Middle East. Iran, which maintained diplomatic relations with Israel pre-1979, received the best conventional military equipment offered by the United States such as the F-14 'Tomcat' fighters. Having been ejected from the country, The United States decided to back the traditional Sunni Muslim Arab states such as Jordan, Iraq and most prominently Saudi Arabia. Throughout the 1980's, relations between Iran and Saudi Arabia worsened as Khomeini called the Saudis American lackeys and used the annual Hajj pilgrimage as an occasion to foment revolt through protests staged by Iranian pilgrims. The American backing of a Shiite government in Iraq, including some prominent Ayatollahs, who had lived in Iran during the rule of Saddam Hussein, has raised Saudi concerns of a growing tide of Shiite power in the region. 

The sectarian violence in Iraq between Sunnis and Shiites has further boosted this idea, while Hezbollah's successful defence in the summer of 2006 in a month long war with Israel, has further boosted Shiite confidence. In February 2007, amid the building tension between Saudi Arabia and the Shiite world, Saudi Arabia sent Prince Bandar to Teheran to study efforts to ease tensions in Iraq and Lebanon. The Iranian nuclear power negotiator Ali Larijani visited Saudi Arabia, to seek the Saudi monarch's help in easing tension between his country and the United States over Tehran's nuclear program. The series of visits culminated with a visit to Riyadh by Iranian president Mahmoud Ahmadinejad in February 2007 to discuss ways to moderate tensions. The two leaders agreed to resist forces trying to "divide" the Islamic world, including preserving Iraq's national unity and preventing sectarian infighting in Lebanon - where Saudi Arabia has backed American calls to isolate the pro-Syrian camp. Indeed, even as Syria's entanglements with the Hariri case worsened its relations with Saudi Arabia, there have been clear signs that Syria, Iran's principal ally in the Middle East (excluding Shiite Iraq) is interested in revamping the relationship with the Saudi Arabia. This has gained further impetus thanks to Syria's support to the Mecca accord, which set the basis for the reconciliation between Fatah and Hamas through the formation of a national unity government in Palestine. No doubt Saudi Arabia was also interested in thwarting Iranian support for Hamas, by asking it to agree to form the National Unity government. 

Nevertheless, the United States remains very concerned about Iran because of the ties between the Iraqi Shiite leadership and Iranian authorities. As noted by Seymour Hersh, the US state department is separating the Middle East into 'extremist' and 'reformist' camps. Broadly speaking, despite a paucity of actual 'reform,' the Sunni states belong to the latter classification, by virtue probably of not being extremist (no word on where secular ruled and largely Sunni populated Syria stands in this equation). This policy is materializing on the ground through what Seymour Hersh has suggested are covert operations are being run or at least funded by Saudis to reverse the Shiite tide. Prince Bandar, the very same who recently visited Tehran, is said to be one of the key Saudi players in the strategy and he has maintained a close relationship with key players from the Bush administration, Dick Cheney and Elliot Abrams in particular. 

The long term prospect - and potentially an additional internal political risk - is that Saudi fears of the Iranian dominated Shiite wave, have aligned its foreign policy outlook with Israel. They have the same concern. Israel and Saudi Arabia also share a concern over the increased influence of Hezbollah in Lebanon. Moreover, Saudi Arabia is also concerned that should Iran continue to spread its influence unchecked, it could also fuel unrest among the Kingdom's own Shiite population, which is located in the strategic oil rich Eastern Province, where sectarian tensions are already high, and where Khomeini tried to foment revolt in the 1980's. It was in fact Saudi Arabia and the Sunni Gulf states that encouraged - and largely financed, or promised to do so - Iraq's 8-year war against Iran. 

Oil and the Elusive Diversification
Of course the main reason for the West's interest in Saudi Arabia is oil and New York's main oil futures contract, light sweet crude for delivery in March '07, was quoted at USD 59.39 a barrel, which is 20% higher than it was in January '07, when it was priced even below USD 50 a barrel. Problems faced by oil companies in Nigeria because of the Niger Delta separatists, have partly accounted for the recent price recovery as well as a very cold winter in North America and the end of the 'inundation' effect to lower oil prices before the US Mid-Term elections. However, where Saudi Arabia is concerned (as the largest oil OPEC and world oil producer), the International Energy Agency (IEA), which published its Mid Term Oil Market Report last February, noted a marked reduction in supply from non-OPEC countries. IEA suggests that key non-OPEC members such as Norway and Mexico have likely surpassed their peak production capacity, while Canada has yet to fully exploit the tar sands, because of the cost of industrial development that they imply - and the Canadian government has also announced that it would stop giving tax breaks for exploration in the tar sands. As demand continues to increase, OPEC countries, which supply roughly 30% of oil in the world, will play an ever more important role. Saudi Arabia, therefore, will therefore retain its strategic and economic importance, even as new untapped resources must be exploited in order to meet demand. 

Oil and Gas Journal says that Saudi Arabia has 261.9 billion barrels of proven oil reserves (65-70% is Light Crude) or a quarter of the world's conventional world oil reserves. Around two-thirds of Saudi reserves are considered "light" or "extra light" the most valuable grades of oil, with the rest either "medium" or "heavy". More than half of Saudi Arabia's reserves are based in eight fields, including Ghawar (the world's largest oil field, ca.70 billion barrels left) and Safaniya (the world's largest offshore oilfield, ca.35 billion barrels). The Saudi oil company ARAMCO (which controls about 98% of the Kingdom's reserves) has also embarked on a billion dollar project, named Qatif Producing Facilities Development Program (QPFDP) to add 800,000 bpd to its oil production. Asia now takes 60% of Saudi Arabia's oil and most of the country's refined products. Saudi oil is largely exported via oil terminals in the Persian Gulf at Ras Tanura and Ras al-Juaymah as well as Yanbu in the Red Sea. 

Heavy Oil to the Rescue 
There are disputes whether or not Saudi Arabia's oil reserves have been 'over' or underestimated. However, as the country slows production of its heavier grades of crude, its future production goals rest on development of the lighter oil grades present in areas near the inhospitable 'Empty Quarter' region at the Shaybah field. Nevertheless, the greatest potential for new oil finds lie in the difficult to extract, but untapped, heavy crude resources. Success would ensure the Kingdom's continued dominance of oil production for several more years. Heavy oil is very dense and expensive to bring to surface. It also has more sulfur, making it more difficult therefore more costly to refine than light crude. Technical innovation is needed to help develop the largely untapped heavy crude resources (which geologist believe exist in abundance in Canada as well as the eastern part of the hemisphere). Chevron has been experimenting a technique, using steam injection, to loosen the heavy and sludge-like oil, at a field in the neutral zone Saudi Arabia shares with Kuwait. The fact that steam extraction techniques have proven effective in drawing crude oil from the tar sands in Canada, which are much thicker than heavy crude, suggests the Saudis can be optimistic. 

Economic and Diplomatic Diversification
The 'heavy oil' project is of vital importance to Saudi Arabia, as despite efforts that started in the 1980's with the formation of a Saudi chemical industry, SABIC, the economy remains to this day almost entirely dependent on oil production and refining. However, King Abdullah, has promoted privatization and the Kingdom has shown more interest in developing the economy, having joined the WTO in 2005, which led to an increase in the amount of non-oil (but still oil related) petrochemical exports. Membership in the WTO has also forced Saudi Arabia to relax restrictions on foreign investment (FDI), and this too has increased. In 2005, FDI was estimated at some USD 5.6 billion, no doubt also favored by the reduced tax burden as corporate tax on foreign-owned firms has been reduced from 45 per cent to 20 per cent. Saudi Arabia also plans to build new cities, such as King Abdullah Economic City on the Red Sea, to attract investment and provide an outlet for employment to the young population. Saudi Arabia has also been diversifying relations with Russia, highlighted by the visit of President Vladimir Putin to the Kingdom in February 2007, while it has already opened to other countries in Asia. The diversification of foreign relations has strategic motives - Russia is a permanent member of the Security Council - but it is also prompted by practical need. Since 9/11, the perception of Saudi involvement (accented by Michael Moore's popular documentary 'Fahrenheit 9/11'), has encumbered Saudi citizens' visa applications to the West. Saudi businessmen don't want visa hassles, and despite the sordid past between the Soviet Union and Saudi Arabia, shared business interests should avoid bureaucratic difficulties. Putin was accompanied to Riyadh by a delegation of 60 business executives, who discussed investment and joint venture opportunities. In 2004, Saudi Arabia had already granted Russia's Lukoil Holdings rights to explore and produce natural gas in an area known as "Zone A," located near the Ghawar oil field.

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Update No: 068 - (26/11/13)  

Summary: The Saudis have not liked the United States' re-orientation of strategic interests in the Middle East - buttressed by a far greater autonomy in energy supply. Syria, Iran and perhaps even Egypt (where the Saudis are predicting some US objections ahead in light of an obvious revival of the military government, starting with the US announced ban on the sale of military equipment to Cairo) are at the heart of this re-orientation of American priorities - a shift that the Saudis might well describe as a 'betrayal' from what has been their historical ally in the Middle East. Obama's decision not to intervene militarily against al- Assad was a shock to Riyadh, which has been left more isolated as a result of the Russian-American understanding on Syria's elimination of its chemical weapons. And of course, the rift between Riyadh and Washington over Syria has only widened by the new course of relations between the U.S. and Iran. The new and odd common front between the Tehran and Washington against the proliferation of jihad in Syria may prove very difficult for the Saudis to digest.

Strange Bedfellows
While members of the so-called " 5 +1" (China, France, Germany, Great Britain, Russia and the United States) have reached a deal with Iran over that country's nuclear program, Saudi Arabia and Israel have emerged as strange bedfellows, according to the well honed logic of the 'enemy of my enemy is my friend' variety that has won over many followers in the Middle East. There have been rumors of such an alliance before, but now the prospect of improving relations - however precarious - between Teheran and Washington have intensified suspicions of collusion between Jerusalem and Riyadh. No less than the London 'Sunday Times' suggested that the two governments have discussed an agreement to prevent Iran from acquiring nuclear capability. The Saudis have dismissed this suggestion entirely; however, already last June 27 the same newspaper reported that the Saudis had even agreed to grant Israel fly-over rights (allowing Israeli jets to complete a return flight to Tehran without refueling) including the possibility of using an actual Saudi air base if needed. Both Saudi Arabia and Israel consider the American diplomatic opening to Iran to be a policy of 'appeasement' and therefore failure. Israel's Prime Minister has continued to present the Iranian nuclear issues in Manichean terms, unable or unwilling to even consider the possibility that Iran's nuclear program may have been pursued as a bargaining tool rather than actually being about obtaining an actual nuclear weapon.
The Saudis want to use the nuclear program as a tool of isolation and join Israel in presenting the negotiations in Geneva as a "Chamberlain, Munich 1938" scenario, failing to contain German territorial claims and encouraging appetite for conquest and the will to power. Of course, Iran has not invaded anybody - not in the past couple of thousand years - and it has not acquired or built a fraction of the armament that Nazi Germany had accumulated by 1938. That aside, Saudi Arabia considers only two viable agreements in Geneva - or any other venue for that matter: Iran being prevented from pursuing a nuclear weapon with a significant reduction of its nuclear program and or an intensification of sanctions and other retributions. In this it agrees with Israel, which would be the one to launch an attack even without the support (diplomatic and military) of the United States.

The first part of an agreement with Tehran was achieved on November 23 in a Middle East context that is all but 'tranquil'. On 19 November an attack devastated the Iranian Embassy in Beirut, Lebanon, killing at least 23 people dead and 146 injured, raising several suspicions of either Israeli or Saudi involvement. Ultimately, the Israeli and Saudi regimes are engaged in separate but equally intense extremisms and they fear losing their respective leadership pretensions in the Middle East. Israel cannot tolerate the notion of having a more formidable rival in the region and one that despite sanctions and impediments has continued to grow, developing its own technology and achieving admirable social targets such as almost 100% literacy and high numbers of university graduates (more women than men). More significantly, Saudi Arabia may have feelings of 'jealousy' toward Iran.

The Kingdom has always insisted on being the standard-bearer of Sunni Islam, doing so by practicing and preaching fanaticism, most starting at home and fearing any suggestion of change; indeed, in Saudi Arabia, students are not allowed to study philosophy or related humanities, for those are considered subversive. The Islamic Republic of Iran, however objectionable some of its aspects may be, has at least been forced to evolve and challenge its own initial fanaticism with a good dose of pragmatism. Iran has blended loyalty to Islamic principles with desire for progress, modernization and sophistication. The Saudi monarchy is engaged in 'byzantine' internal power games over the succession while Iranian politics, even under the Ayatollahs, has been dynamic and for all the sanctions and impediments, Iranian society has achieved huge advances in science, technology and society, outperforming the richer Saudi Arabia.

Indeed, the Saudis are being threatened by Iran, not on the military front, but on the 'ideological' front just as the Kingdom's relationship to the United States has started to erode. In November, Saudi Arabia refused to become a non-permanent member of the UN Security Council, reflecting its dissatisfaction with the change in US foreign policy marked by its shift toward diplomacy in the Syrian civil war and with Iran.

The Saudis have not liked the United States' re-orientation of strategic interests in the Middle East - buttressed by a far greater autonomy in energy supply. Syria, Iran and perhaps even Egypt (where the Saudis are predicting some US objections ahead in light of an obvious revival of the military government, starting with the US announced ban on the sale of military equipment to Cairo), are at the heart of this re-orientation of American priorities - a shift that the Saudis might well describe as a 'betrayal' from what has been their historical ally in the Middle East. Obama's decision not to intervene militarily against al- Assad was a shock to Riyadh, which has been left more isolated as a result of the Russian-American understanding on Syria's elimination of its chemical weapons. And of course, the rift between Riyadh and Washington over Syria has only widened by the new course of relations between the U.S. and Iran. The odd common front between the Tehran and Washington against the proliferation of jihad in Syria may prove very difficult for the Saudis to digest.

France has been another suspicious player in the '5+1' (the five permanent members of the UN Security Council plus Germany) nuclear diplomacy with Iran. In early November, France stood out, in blocking an early deal. In fact, France's block may well have stemmed from its shared atomic interests with Saudi Arabia. The Kingdom has not hidden the fact that it wants to adopt nuclear energy because it has a power consumption that is growing by 8 percent annually and that therefore more and more of its annual oil production is being used domestically rather than earning hard currency in the international market. The Kingdom has plans to build 16 nuclear reactors in the next decade in a project valued at USD 80 billion.

France's Areva, which recently lost a contract to build a nuclear reactor in Jordan to Russia's Rosatom, is very keen on getting the mega-contract in Saudi Arabia. In 2011, Areva and EDF - Electricité de France (both majority-held by the State), the largest manufacturer and distributor of energy in France opened an office in Riyadh to provide training and to make contacts with local businesses that will compete for subcontracts in the context of the forthcoming nuclear energy program. France, Israel and Saudi Arabia have formed an axis of convenience against Iran, each with its own particular agenda and all aiming to secure further isolation for Iran. As part of the odd friendship, while President Hollande received a 'triumphant' welcome at the Israeli Parliament (the Knesset), French and Saudi special forces were holding joint exercises in the Kingdom. The Saudis will come to France, in the Alps, to take part in the second phase of this plan. 'La Tribune' mentioned, last August, that France had signed a contract valued at one billion Euros to build six warships for the Saudi navy. In that respect, France can benefit from continued or heightened tensions in the Persian Gulf.

There is little chance that the Saudis would award a nuclear reactor contract to the Russians (as did Jordan, which has a more independent parliament), the very same who have backed President Asad of Syria so far, leaving Areva as the sole consortium left with the right experience. More cynically, Saudi Arabia, given its energy production/domestic usage/export relationship benefits from the perceived threat of a nuclear armed Iran in that there is the price of a barrel of oil (until recently above USD 100/barrel) which today includes a premium of anywhere from USD 5 to USD 10 because of the Iran nuclear risk. As an immediate consequence of the Iran-5+1 deal, the price of oil on the Asian stockmarket dropped sharply: Brent oil dropped 2.26 % and Light Sweet Crude 1%, respectively, 108.54 and $ 93.95 per barrel. According to analysts, the current price of crude oil includes a premium estimated at between five and ten U.S. dollars due to geopolitical instability linked to the Iranian nuclear issue. The Saudis need high oil prices in order to help finance the long series of welfare and employment opportunities for young people that have so-far managed to avert the 'Arab Spring' or 'Arab Awakening' from breaking out in the Kingdom.

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