Saudi Arabia and Oil: Coping with the Challenge of Osama bin Laden

(Washington Institute for Near East Policy) Simon Henderson - * On Jan. 26, 2005, Riyadh announced that Prince Nawaf, head of the Saudi General Intelligence Department, had been relieved of his post. The prince reportedly never fully recovered from a brain hemorrhage he suffered at the 2002 Arab Summit in Beirut. * An underlying theme in bin Laden's statements is that the oil riches of the region are being stolen by the non-Muslim West. In 2004, al-Qaeda began to deliberately target oil-related facilities in Saudi Arabia for the first time. Seven people were killed in a May attack at Yanbu on the Red Sea coast, and thirty died in a similar outrage at al-Khobar on the Persian Gulf coast later the same month. * The Saudi authorities claim that the oilfields are well protected - the state oil company Saudi Aramco employs what amounts to its own private army, backed by the paramilitary Saudi National Guard commanded by the de facto head of state, Crown Prince Abdullah. Whenever potential problems seem to emerge in Saudi Arabia, the markets get nervous. * Alternative technologies might eventually reduce the role of oil in the world economy. In the short term, however, bin Laden's threats should serve as a wake-up call to policymakers, spurring them to institute mechanisms now that reduce Saudi Arabia's pivotal and threatened role. The writer is a London-based associate of the Washington Institute.

2005-02-03 00:00:00

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