Saudi King Fahd bin Abdul Aziz appears to be nearing the end of his life, if he is not already dead, as was reported by Washington's pro-democracy Saudi Institute at the end of May 2005. Rumors of the King's demise have been swirling since late April, and they have accelerated in recent days with his recent hospitalization, which reportedly required an emergency tracheotomy. Fahd's death will be the beginning of a period of crucial strategic importance to the world, first because the ensuing struggle for succession could create instability in the world's biggest energy exporter, and more importantly because his ultimate successor will be in a position to determine Saudi Arabia's future energy policies.
Traditionally, the al-Saud family has designated a successor to the King, who was chosen by consensus by the royal family based upon clearly defined rules of family and seniority. Under this system, Crown Prince Abdullah bin Abdulaziz Al Saud ("Crown Prince Abdullah") was Fahd's indisputed heir apparent. Fahd, however, issued a possibly ill-advised edict in 1992 that substantially broadened the options for succession, muddling the picture considerably. The edict granted the King the authority to appoint or dismiss his successor, and it also made the so-called second generation Saudi princes (the grandsons of Fahd's father, the late King Abdul-Aziz) eligible for the throne. Once the edict was issued, Abdullah had 10-20 rivals for the throne. Even before Fahd's stroke in 1995, the royal family was consumed by factionalism and shifting political alliances traceable to the edict and related to his eventual succession, with Saudi Defense Minister Prince Sultan bin Abdul Aziz ("Prince Sultan") emerging as Abdullah's foremost rival for the throne.
Prince Sultan is Fahd's full brother; both are members of the al-Sudairi clan of al-Sauds, which is the most powerful single faction within the royal family. Other prominent Sudairis include current Interior Minister Prince Nayef, Riyadh Governor and royal family interlocutor Prince Salman and Deputy Defense Minister Prince Abdel-Rahman. Prominent second generation Sudairis include longtime ambassador to the United States Prince Bandar and de facto Saudi Armed Forces Commander Prince Khalid, both of whom are sons of Prince Sultan. The Sudairis as a group are seen as social progressives (or what passes for such in Saudi Arabia), deeply committed to the alliance with the United States and driven more by a desire to accumulate wealth than by Arabist causes. The Sudaris are seen as being accomodative to Western wishes of higher levels of oil production and lower market prices for oil. Current Saudi Oil Minister Naimi is a Sudairi appointee and is considered to be within the Sudairi political camp.
Crown Prince Abdullah is Fahd's half-brother and is from the smaller Shammar faction of the royal family. There is much to admire about Abdullah. He is a hard working and capable administrator, his abilities in this regard having impressed Fahd so much that Abdullah was essentially running the Saudi government by 1995. Abdullah spent many of his formative years living in the desert with Bedouin tribes, and came to absorb their simple yet strongly held values of honor, frugality, charity and courage. He is almost unique within the Saudi royal family in that he is seems uncorrupted by wealth and power. He is deeply religious, holds traditional views and is a bit of an Arabist along the lines of Nasser, which of course is of concern to pro-Israeli elements within the United States. He supported a boycott against Egypt in response to the Camp David Accords with Israel, and is strongly committed to the Palestinian cause. Abdullah is supportive of pan-Arab cooperation on matters of regional importance. He counseled against Saudi participation in the Gulf War, although he reconciled himself to it as King Fahd and the Sudairis demanded.
Crown Prince Abdullah is also the commander of the Saudi Arabian National Guard (SANG), a mostly tribal miltary force that operates as a counterweight to both the regular Saudi military and the Sudairi clan that tends to control it. SANG units, while not quite as well-equipped as the regular forces, are near-fanatical in their devotion to Abdullah and traditional Saudi values and may well be the superior fighting force among the two.
Within a month of Fahd's stroke in November 1995, Prince Sultan and the Sudairis moved to depose Abdullah as the governing regent, possibly with the support of the United States, which was concerned about Abdullah's Arabist tendencies. When Abdullah was out of the country, Sultan petitioned the Ulema (the Saudi supreme religious authority) to remove Abdullah as SANG commander and promote Sultan to the throne. Rebuffed by the Ulema, Sultan and his allies were rumored to be plotting Abdullah's assasination when he returned. Undaunted, Abdullah demonstrated considerable personal courage not only by returning, but by dancing openly in tribal celebrations that were held upon his return. SANG was mobilized, and the Sudairis backed down. On January 1, 1996 Fahd transferred his governing powers to Abdullah, bringing what seemed to be a permanent resolution to the crisis. However, the 1992 succession edict remained in force. While Abdullah must be considered a heavy favorite for the throne when Fahd dies, it is not a certainty.
In the past decade, Abdullah has demonstrated himself to be an effective ruler, and has remained largely faithful to both the U.S. alliance and the OECD's desire for accomodative oil production policies. In the past year, however, rising global demand for oil and declining production elsewhere have driven oil prices to roughly twice the pricing range that is preferred by the industrialized West. The United States in particular is expecting Saudi production to significantly increase in coming decades. Specifically, the U.S. EIA long-range oil supply forecast foresees Saudi production in the year 2025 to be about 22.5 Mb/d, which is more than double its current production of about 9.5 Mb/d.
I don't know whether it is physically possible or not, but if the Saudi fields could be produced at the kind of Reserve to Production ratios that are favored by commercial oil companies, they may well be able to meet the EIA long term projections. Whether this would be in the best interest of humanity is debatable, because the resources would be depleted much faster if they were produced in such a manner (Some of the more conscientious among us would prefer to save some of the oil for our children). Whether it would be in the best interest of Saudi Arabia is debatable as well, because it would clearly reduce the total monetary value that will ultimately be obtained for the resource. In other words, in addition to saving the investment in infrastructure that would be required to produce at 22 Mb/d, the Saudis would do much better financially in the long term by maintaining current production levels that could be sold at higher market prices than by pumping it out all at once, which would keep market prices lower. Knowing what we do about Crown Prince Abdullah, I would expect him to recognize this and to make his decisions as to future infrastructure investment and production based on the welfare of the Saudi people.
The geopolitical reality, though, is that the industrialists and financiers who wield the real power in the West would clearly prefer a few more years of economic growth that are not constrained by tightening energy supplies to preserving a modicum of resources for the sustenance of future generations. The U.S. military ultimately answers to those interests, and it has the bulk of its deployable forces stationed just over the Saudi border in Iraq. While the Saudi forces might give a good account of themselves in the event of a U.S. invasion (especially SANG), the U.S. has the means to prevail. For this reason among others, the Saudis have seemed to be remarkably compliant with U.S. requests to increase production in the past years. They have actively reassured the U.S. and the international financial community that their resources are sufficient to meet growing world demand. In order to address concerns, they have outlined a plan to increase production capacity to 12.5 million barrels a day by 2009. However, not all Saudis are embracing the long term projections of the EIA. One Saudi official who was interviewed on a not for attribution basis by the New York Times cautioned that production beyond 12 Mb/d would damage the oil fields.
Then there is Oil Minister Naimi, the Sudairi appointee. He stated at the end of 2004 that the country's proven reserves could reach as high as 461 billion barrels in the near future. Somewhat shockingly, at an earlier conference in Washington, DC on April 28, 2004 he apparently claimed that the Kingdom's previous estimate of 261 billion barrels had now more than tripled to 1.2 trillion barrels. Moreover, he was quoted as calling this new estimate "very conservative." The Oil Minister's speech did not refer to any discoveries of new oil fields. According to a recent speech made in Houston by Saudi Aramco's CEO Abdallah S. Jumah (who works for Naimi) Saudi oil production capacity could grow from its current 11 million b/d to over 23 million b/d to meet world demand, neatly dovetailing with the EIA long term projection to year 2025.
Naimi and his Sudairi patrons appear to be falling over themselves to assure the U.S. that they would work to ensure the production increases that Wall Street expects the next two decades. Is this a gambit on the part of the Sudairis to secure U.S. support for one of their own in the succession struggle when Fahd finally dies? I suspect that it has something to do with it. While the Saudis shown themselves to be quite touchy at any U.S. attempts to intervene in the royal politics of succession (an American ambassador was once requested to leave the country after expressing an opinion on the topic at a social gathering), it would be naive to think that U.S. would not try to exert its influence on the process at some level, potentially decisively. While Prince Sultan is reportedly in ill health, the U.S. might be especially receptive to Prince Bandar, who made many connections among the political class in Washington during his time as ambassador.
This June 3, 2005 article in The Washington Times makes it clear that the battle lines for Fahd's succession are already being drawn:
Saudi analysts believe Abdullah "will find it impossible to wrest the throne away from the Sudairis, who many feel want to maintain power" within their branch of the family.
According to the Saudi Institute, the struggle between the Sudairis and Abdullah, if one were to occur, "would pose a greater threat to the regime than the violence the government faced from Islamist militants" last summer. That remains to be seen. But it is clear the death of the king of Saudi Arabia will, if nothing else, affect the region's markets.
The Washington Times and the Saudi Institute are both connected to the pro-Israel, neoconservative clique that holds much sway in Washington these days and that is responsible for the war in Iraq. It isn't surprising that this political camp would be talking up a Sudairi successor in favor of the more conservative, pro-Palestinian Abdullah. While Abdullah hasn't done much to palpably offend the neocons in the past decade, they undoubtably fear that he will return to his Arabist roots should he assume the unfettered authority of the throne.
Abdullah, however, has his own cards to play. He still controls SANG, is popular among Saudi religious leaders and has the allegiance of many of the Bedouin tribes that still constitute the grass roots of Saudi society. In addition, he may have political support in the U.S. in the form of the major oil companies. In a bid to undercut the Sudairis, who essentially control Saudi Aramco and the Oil Ministry, and to press for reforms within Aramco, Abdullah proposed several years ago to open the Saudi oil and gas fields to foreign investment by international oil companies. This is just the tonic that is needed by the ChevronTexacos and ExxonMobils of the world (not to mention the Halliburtons), because those companies are otherwise destined to suffer a slow decline as a result of reserve depletion within the next decade. The Sudairis, led by Oil Minister Naimi, marshalled all of their political power to shoot the proposal down and succeeded in doing so, except for some limited ventures involving natural gas. Even those ventures have yet to be finalized with the companies who were designated to be awarded franchises in the gas-producing regions, probably because of more Sudairi foot-dragging. The lack of progress has more to do with royal family politics than it does with economics or physical constraints.
The Sudairis are fiercely protective of the exclusive franchise given to Aramco, and remain hostile to the idea of foreign oil companies operating on Saudi soil. Abdullah at least purports to be receptive to the idea. Ergo, the Big Oil lobby in Washington may support Crown Prince Abdullah, while AIPAC and its fellow travelers want a Sudairi.
If King Fahd is truly on life support or is already dead, you can bet there is quite a bit of activity going on right now behind the scenes both in Riyadh and in Washington. The two factions may literally be bargaining against each other for Washigton's support. If Washington backs Abdullah, it buys continuity, probable short term stability and a possible new lease on life for the major oil companies, but at the risk of having to deal with a more confident King Abdullah championing Arabist interests. If it backs the Sudairis, it risks a civil war pitting the Sudairis and the regular military against SANG, tribal forces and conservative religious elements. The safe and smart choice would be to support Abdullah. Whether the current Administration is likely to make such a choice, though, is open to debate.