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Oil kings: The House of Saud’s uncertain future

By Mohamad Bazzi – Reuters –

In his annual “state-of-the-kingdom” address on Jan. 6, Saudi Arabia’s King Abdullah hoped to reassure the world that his country is prepared to absorb the economic shock of plummeting oil prices and to deal with the worsening conflict in its two neighbors, Iraq and Yemen. The message might have been more effective had the 90 year-old king delivered it personally, but Abdullah has been hospitalized since Dec. 31 for pneumonia.

Instead, Crown Prince Salman delivered the speech on the king’s behalf. That image — of an aging heir with his own health troubles standing in for a nonagenarian king — did little to address concerns about whether Abdullah is still fit to lead. Larger questions over the line of succession in one of the world’s most important oil producers remain unanswered.

The 79-year-old Salman, a half brother of the king and his designated successor, has taken on a larger public role in recent months, standing in for Abdullah at a summit meeting of Persian Gulf leaders in Qatar last month. But Salman himself is in poor health, and reportedly suffers from dementia. If Abdullah dies or is incapacitated, and Salman ascends to the throne, he might not be king for long. It’s also unclear who Salman would designate as his crown prince — and that crucial decision could destabilize the royal family.

Prince Muqrin, 69, who has served as head of Saudi intelligence and in other senior positions, was installed last year by Abdullah into the newly created post of deputy crown prince, making him second-in-line to the throne. But any new king has the right to choose his own crown prince. If Muqrin is passed over by Salman, that could set off a succession battle within the House of Saud at a time of regional crisis and instability in the global oil markets.

Beyond Salman’s expected ascension to the throne, the Saud dynasty faces a larger challenge over succession within its system of hereditary rule. The kingdom was founded in 1932 by Abdulaziz al-Saud, and he left behind a system where the throne is passed from older son to younger son (the king had 35 surviving sons when he died in 1953). With the old generation of Abdulaziz’s sons dying off or passing into senescence, the kingdom has no clear plan to hand power to the “new” generation of royals — Abdulaziz’s grandsons, of which there are at least 30 who could be in line for the throne.

Muqrin is the youngest surviving son of Abdulaziz who is still in the running for the throne (he has several older siblings who have been passed over). If Muqrin becomes king, he would have to appoint a crown prince from the third generation of royals. Muqrin does not have strong enough support within the royal family to appoint one of his sons to the post. One theory is that Abdullah positioned Muqrin as second-in-line so that he would be beholden to Abdullah’s sons, one of whom could become king once the generational shift takes place.

Saudi King

Aside from the king’s illness and questions over succession, Saudi Arabia is faced with a series of regional and economic threats.

Most prominently, the kingdom must cope with plunging oil prices. On Jan. 7, Brent crude, the international benchmark, fell below $50 a barrel for the first time since May 2009 — a drop caused in part by Saudi’s refusal to cut high production levels. At the last OPEC meeting in late November, the Saudis led the charge to prevent the cartel from cutting production, which would have driven prices up. Instead, the kingdom is trying to gain more control over the global market, and to drive out U.S. shale oil, which requires higher prices to remain competitive.

So far, Saudi leaders have been able to withstand the economic shock by increasing oil production to make up for falling prices, or by accessing some of the kingdom’s $750 billion stashed in foreign reserves. But those are not long-term solutions.

The other challenge for Abdullah’s successor will be containing Iran, the kingdom’s regional rival. Saudi Arabia is engaged in proxy battles with Iran in several arenas: Syria, Iraq, Lebanon and Yemen. The kingdom is using oil as a weapon to punish Iran, and Russia, for their support of Bashar al-Assad’s regime in Syria. Facing Western sanctions and economic isolation, the Iranian regime is dependent on oil remaining at $100 a barrel or more to meet its budget commitments.

The proxy war has played out most intensely in Syria and Iraq. After the American invasion of Iraq in 2003, neighboring Sunni regimes backed Sunni militants, while Iran supported the Shi’ite-led government and Shi’ite militias. When various Middle Eastern regimes realized that the United States would — in their view — lose its war in Iraq, they began maneuvering to protect their interests and to gain something out of the American withdrawal. Saudi Arabia, which saw Iraq as a bulwark against Iranian influence, tried to destabilize the Shi’ite-led government in Baghdad.

The Saud dynasty views itself as the rightful leader of the Muslim world, but Iran has challenged that leadership for several decades. Although Saudi Arabia has a Sunni majority, its rulers fear Iran’s potential influence over a sizable, and sometimes-restive, Shi’ite population concentrated in the kingdom’s oil-rich Eastern Province.

Any new leader is unlikely to change the larger contours of Saudi foreign policy — or the kingdom’s use of oil to enforce its interests and try to keep Iran at bay. But the new king and his inner circle will face decisions on succession that could reshape the ruling family and the monarchy’s future for generations to come.

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