What if Saudi Arabia were Poor?

Implications for America and the Middle East

America benefits from Saudi Arabia’s wealth. By virtue of being rich in oil reserves, and able to spend the proceeds from that oil however its royal family sees fit, the Kingdom of Saudi Arabia has great sway in the Middle East. Instances of the Kingdom’s impact include the multinational coalition it currently leads against the Shi’a Houthi regime in Yemen and its continuing power within the Organization of Petroleum Exporting Countries (OPEC).

Saudi Arabia’s wealth is important to those interested in US foreign policy because America is an unofficial guarantor of Saudi sovereignty, tacitly giving assurance that it will protect the Kingdom from invasion.  It is also important because the US leverages its relationship with Saudi Arabia to implement its policy in the region. From the US’ perspective, an affluent Saudi Arabia helps America get what it wants.

However, the Kingdom’s coffers are in trouble. The development of new oil and gas resources in America have already vaulted the United States ahead of Saudi Arabia in crude production, and many countries are racing to develop replacements for petroleum altogether.[1]  If countries really do abandon petroleum (or it becomes so scarce that it is no longer profitable), the opulence derived from Saudi Arabia’s near monoculture of oil production will come to an end.

Why should anyone be concerned with this?  Well, because America has a use for a powerful partner.  Nixon’s administration certain did, for one.  In 1969, President Richard Nixon put forward his “Twin Pillars” policy, a broad effort designed to contain Soviet expansion in the Middle East.  To counter communist influence, the US saw the need to increase military investment in the area.  To have increased spending with every nation in the Middle East would have, of course, been very expensive.  So, the United States instead focused its support on Saudi Arabia (increasing spending from 16 to 312 million dollars) to enable it to police American interests.[2] 

Fast-forward to today’s international scene and this arrangement might involve a group like Hamas, on whom the US has leveraged Saudi Arabia several times.  For instance, in 2004 the US pressured the Kingdom into reducing aid to the Hamas for its bellicose conduct.  In partial response to this, Hamas’ militant wing forged a surprising, 11-year relationship with Shi’a powerhouse Iran.  However, when that arrangement lost its potency in 2015, Hamas again turned to that old friend of the United States: Saudi Arabia.  That renewed tie to US-influenced Saudi Arabia pressured Hamas’s military arm to reconsider its intransigence to peace settlements with Israel.[3]

But, if Saudi Arabia were to lose its potency as regional benefactor, America would have to rethink how it does business in the Middle East.  It would have to change how it influences countries that Saudi Arabia currently affects, it would have to revise its relationship with Iran, and it would have to consider implications to Israel’s fragile hopes for peace.

America’s influence on Saudi Arabia permeates to the rest of the Arab world.  If it were to lose its wealth-enabled sway over its regional neighbors, America would be forced to confront the costs of an even more fragmented Middle East or find a new partner to act through.

If the first scenario, increased foreign spending would be an inevitable outcome if the US sought to maintain its level of influence in the region.  Like President Nixon’s 1969 dilemma, more hearts to win simply means more money.  Of course, this could easily also mean greater troop involvement.  Currently, the US has military advisors in 14 out of the 23 countries and entities that the Encyclopedia Britannica considers the “Middle Eastern.”[4]  If it did not have Saudi Arabia to “police” American interests anymore, the US could conceivably have to expand its already broad security cooperation commitment to every country in the region that would allow it.

If America were to seek a powerful new friend, though, several nations would likely seek the job--and Turkey would probably be the first.  The Republic of Turkey, a member of the North Atlantic Treaty Organization and long-time friend of the United States, would certainly make a good option from an American perspective.  Its nature as both a democracy and a Muslim-majority state already goes a long way towards bridging the gap between American interests and regional actors (and it could potentially go much further if its rich neighbor to the south were not so rich anymore).  However, like any democracy Turkey’s national budget is subject to the will of its parliament and executive, a larger group of people, if nothing else, than the ruling dynasty members that control much of Saudi Arabia’s wealth.  According to Prince Khalid bin Farman al-Saud, a “dissident” member of the royal family living in Germany, “there is a lot of state money...which is determined by the king alone.”[5]

The Arab Republic of Egypt might be another choice.  It is the most populous nation in the Arab world, boasts millennia’s-old written history, and is often heralded as the region’s cultural leader.[6]  However, Egypt is only a few years removed from the aftermath of its revolution that saw the ouster of long-time US partner Hosni Mubarak.  Six long years after Mubarak’s resignation, Egypt is only now beginning to resemble even a shadow of its former stability.[7]

Of course, the United Arab Emirates would certainly do.  A historical partner to US interests, the seven princedoms that comprise the UAE have shown increasing interest in becoming a regional leader since 2011.  In fact, according to Steven A. Cook, Eni Enrico Mattei senior fellow for Middle East and Africa studies at the Council on Foreign Relations, the UAE already has played the lead role in bringing Egypt’s Abdel Fattah al-Sisi to power, isolating Qatar’s international influence, and militarily intervening against the Islamic State.[8]  Powerful, more economically diversified than Saudi Arabia, and, most importantly, politically amenable, the UAE could be the ideal successor, should the Kingdom lose its prominence.

In any eventuality, though, the loss of a powerful and wealthy Saudi Arabia would mean change.  Inevitably, time, money, and effort would cease to flow into that country like it does now and it would be redirected to one or more new close friends.

Another way a poor Saudi Arabia would affect US policy is by increasing America’s need to deal directly with Iran. Successor state to that ancient world power, Persia, Iran has seen itself as a regional leader for millennia. Perhaps more importantly, though, it views itself the de facto leader of the Shi’a world, a population explosively at odds with Sunnis (of which Saudi Arabia often fancies itself the leader).  Without Saudi Arabia’s hegemony, the Middle Eastern region would likely see a dramatic shift in power toward Iran.

Of course, Iran would not escape a dearth of oil profits unscathed, either.  However, this author doubts it would suffer as badly as Saudi Arabia.  According to Forbes.com, the petroleum industry accounts for 46% of Saudi Arabia’s gross domestic product and a whopping 87% of its budget revenues.[9]  While oil exports feed about 60% of the Iranian economy, Tehran enjoys a somewhat more diverse economic base (with petroleum only comprising 19% of total gross domestic product).[10]  Arguably, sustained low oil prices would hit the Saudi economy harder than it would the Iranian one, tipping the balance of power in Iran, and other economically diversified Middle Eastern countries’, favor.  

The evaporation of a Saudi-led Sunni bloc, in common opposition to Shiite power, would allow Iran to refocus its energies on old irritants like Iraqi internal politics, Yemeni political leadership, and the existence of Israel. This concentration of Iran’s attention on American interests would force the United States to concentrate its foreign policy more on Iran.

Admittedly, it is unclear whether this would ultimately be a good or a bad thing, from an American perspective.  On the positive side, while the US’s direct diplomatic solution to Iran’s uranium enrichment met with mixed reactions at home, it also kept the dispute firmly on the negotiating table (and off the battlefield). 

Of course, more direct interaction also might blow up in America’s face. Newly elected President Donald Trump, for one, campaigned as a vehement opponent of the Joint Comprehensive Plan of Action (the anti-nuclear arms arrangement Secretary of State Kerry brokered with Iran) characterizing it as a set of weak-willed concessions to a hostile actor.[11]  An emboldened Iran meeting a brazen, hardline US president could increase tensions more than either party might like.

Yet, even if war remained just an unsought threat, the lack of a strong opponent to Iran would mean that America, along with other regional players, would have to invest much more time and effort into meaningful diplomacy with that country.

Lastly, a poor Saudi Arabia could greatly impact Israel. Of course, it seems clear on the surface that the Kingdom has little love for the Jewish state, if the two’s lack of diplomatic relations is any evidence. Odd as it might seem, then, the loss of Saudi potency could spell significant trouble for Israel.  Why?  Because Saudi Arabia influences the Arab world—and the US influences Saudi Arabia. This friend-of-a-friend relationship allows the US to exert a stabilizing force by proxy on the Saudi sphere of influence.

One example of just such a thing is the Saudi-proposed Arab Peace Initiative of 2002. The Arab Peace Initiative is a descendant of the 1967 British-sponsored United Nations Security Council Resolution 242, a pronouncement that, among other things, affirmed the inadmissibility of territory gained by war and the need for a just peace in the Middle East.  The terms of API affirm both of those principles and propose that, in return for Israeli evacuation from land gained in 1967 Arab-Israeli War, Arab signatories would enter into a peace agreement with Israel, establish normal relations, and help to provide security for all involved states.

America, a friend of Israel since its inception, encouraged this proposal both officially and otherwise.  Relating to the official capacity, President Bill Clinton said in his autobiography My Life that,

I was calling other Arab leaders daily to urge them to pressure [Palestinian leader] Arafat to say yes [to the API]. They were all impressed with Israel’s acceptance and told me they believed Arafat should take the deal. I have no way of knowing what they told him, though the Saudi ambassador, Prince Bandar, later told me he and Crown Prince Abdullah had the distinct impression Arafat was going to accept the parameters.[12]

In a non-governmental approach (perhaps totally separate from official influence), American Pulitzer Prize-winning journalist Thomas Friedman met with Crown Prince Abdullah in 2002 to personally assist in the publicity of Saudi Arabia’s peace proposal.[13]  If the US were to lose its powerful Sunni friend, Israel would find itself in the midst of very individualistic actors who suddenly have even less incentive to treat it nicely.

Instead of being surrounded by perceived threat nations with financial loss looming if they upset America’s friend Saudi Arabia, Israel could instead be surrounded by perceived threat nations with a lot less to lose.  With less financial pain associated with antagonizing the Jewish state, Israel’s border problems might get even worse than they are now. 

Additionally, without Saudi Arabia to draw Iran’s attention, Israel might be forced to leverage its moderate neighbors Jordan and Turkey into a joint shield against Iranian aggression.  If that were the case, Israel would be in the interesting position of trying to convince its nearby Sunni countries that it is less of a thorn in their sides than Iran would be.

To conclude, a poor Saudi Arabia would force the United States to significantly alter the way it pursues policy objectives in the Middle East. Should Saudi Arabia’s international standing wane, the US either dramatically change its diplomatic interaction with countries that Saudi Arabia now leads, interact more directly and meaningfully with Iran, and warn its ally Israel that things might get worse. Ultimately, of course, whether Saudi Arabia remains wealthy or not is clearly an internal Saudi issue. That country will have to figure out for itself ways to remain solvent and relevant in a changing world. However, it is to the United States’ benefit to remember that many of the policies it cares about, like Middle Eastern peace, are closely bound up with the fate of the Kingdom of Saudi Arabia.

L. Burton Brender is a US Army officer, an Active Member of the Military Writers Guild, and the coauthor of In Cadence, a book of poetry. Follow his blog at Swords & Pens. The opinions expressed here are his alone and do not reflect those of the United States Army, the Department of Defense, or the United States Government.

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Header image: Rich states like Saudi Arabia could likely afford to take on some of the migrants. REUTERS | Ali Jarekji


[1] Grant Smith, “U.S. Seen as Biggest oil Producer After Overtaking Saudi,” July 4, 2014, accessed August 30, 2016, http://www.bloomberg.com/news/articles/2014-07-04/u-s-seen-as-
; Anna Leach, “Race to Renewable: Five Developing Countries Ditching Fossil Fuels,” September 14, 2015, accessed February 13, 2017, https://

[2] F. Gregory Gause, The International Relations of the Persian Gulf (Cambridge, United Kingdom: Cambridge University Press, 2010), 22.

[3] Samuel Ramani, “Hamas’s Pivot to Saudi Arabia May Help Khaled Meshaal Isolate the MIlitary Wing and Obtain a Credible Truce with Israel,” Carnegie Endowment for International Peace, September 17, 2015, accessed February 22, 2017, http://carnegieendowment.org/sada/
; James Dorsey, “Saudi Arabia’s Syria Strategy: Rewriting the MIddle East’s Political Map,” The World Post, accessed February 22, 2017, http://www.huffingtonpost.com/james
; Adam Taylor, “What Saudi Arabia is (and Isn’t) Doing in the Fight Against the Islamic State,” The Washington Post, November 25, 2015, accessed February 22, 2017, https://www.washingtonpost.com/news/worldviews/wp/2015/

[4] Julia Zorthlan, Heather Jones, “Boots on the Ground,” Time Magazine, October 16, 2015, access February 23, 2017, http://time.com/4075458/afghanistan-drawdown-obama-troops/; “Middle East,” Encyclopedia Brittanica, last updated August 14, 2014, accessed February 23, 2017, https://www.britannica.com/place/Middle-East.

[5] Nicholas Kulish and Mark Mazzerri, “Saudi Royal Family is Still Spending in an Age of Austerity,” The New York Times, December 27, 2016, accessed February 22, 2017, https://

[6] Mark Tutton, “Egypt's Cultural Influence Pervades Arab World,” CNN World, February 12, 2011, accessed February 22, 2017, http://www.cnn.com/2011/WORLD/meast/02/12/egypt.

[7] Oxford Business Group, “Egypt Returning to Stability,” accessed February 22, 2017, https://www.oxfordbusinessgroup.com/overview/facing-future-country-seeing-return-stability.

[8] Steven A. Cook, “The Middle East’s Emerging Power: The Rise of the Emirates,” The Octavian Report, Fall 2014, accessed February 22, 2017, http://octavianreport.com/

[9] “Saudi Arabia,” Forbes.com, December 2016, accessed February 22, 2017, http://www.

[10] Glenn Kurtis and Eric Hoogland, Iran, a Country Study (Washington, DC: Library of Congress), pp 160-163; Wikipedia.org, “Petroleum Industry in Iran,” accessed February 22, 2017, https://en.wikipedia.org/wiki/Petroleum_industry_in_Iran.

[11] Eric Lorber, “President Trump and the Iran Nuclear Deal,” Foreign Policy, November 16, 2016, accessed February 22, 2017, http://foreignpolicy.com/2016/11/16/president-trump-

[12] Bill Clinton, My Life (New York, NY: Penguin Random House, 2005), pp 936-946.

[13] Chris Suellentrop, “Crown Prince Abdullah: Saudi Arabia’s Prince of Peace,” Slate, May 3, 2002, accessed February 23, 2017, http://www.slate.com/articles/news_and_politics/