Last month on these pages I explained how the Kingdom of Saudi Arabia emerged from the deserts of Arabia in the early 20th century as an alliance between the ruling House of Saud and the al-Wahhabi clan (War on Terror II: The Janus-Faced Kingdom), who wielded unique religious authority. The conflation of politics and religion in the Kingdom was perhaps inevitable, at least in Muslim eyes, because it was within its territory that the Holy Prophet was born, lived, spread the word of God and died. The two holiest sites in Islam – Mecca, where the prophet was born and where the Holy Book was revealed to him, and Medina, where the Prophet was laid to rest – are both modern Saudi cities as well as places of pilgrimage for all Muslims. Yet it was only in 1986 that King Fahd of Saudi Arabia assumed the title of Custodian of the Two Holy Mosques. This singular title, which was first held by Saladin, the 12th-century Sultan of Egypt and Syria (the one who trounced Richard the Lionheart in the Crusades), bestows huge symbolic resonance.
Why did the fifth King of Sunni Saudi Arabia assume this important title, which has been inherited by all subsequent Saudi Kings, including the present one, King Salman, at precisely that time? One can see this in terms of the attempts by the Saudi monarchy to entrench their standing as a major bulwark of the Muslim faith – despite the fact that some Muslims believe that hereditary monarchy is un-Islamic – at a time when the Islamic Republic of Iran was asserting itself as the first modern state to be founded and run on Muslim principles.
In 1979, as we know, Reza Shah Pahlavi, was toppled as monarch of the ancient land of Persia/Iran in what came to be called the Islamic Revolution. Reza Shah’s rule was seen by many Iranians, not least educated ones who were by no means religious fundamentalists, as self-serving, secular, corrupt, authoritarian and backward-looking. The millions who went out onto the streets of Tehran and other main cities of the country to protest were not particularly religiously motivated. Many wanted a democratic western-style secular republic. It was the exiled mullah, Ayatollah Khomeini, who seized control of the revolution after his return from Paris and began to forge a state based entirely on Shia Muslim principles.
A tiny (and inadequate) historical footnote, here. The term Sunni is derived from the Arabic sunnah roughly meaning “usual practice” or “tradition”, while Shia is the short form of the historic phrase shīʻatu ʻAlī meaning “followers of Ali”. The two strains of Islam diverged after the death of the Prophet Muhammad in 632 CE in a dispute fundamentally about succession. Over centuries, religious practices and beliefs have diverged, although they still of course share the same devotion to the Quran. I’ve heard Western historians say that the rift between the two is much deeper than the rift between Catholicism and Protestantism in Christianity – but then, comparisons are odious.
So, simply put, since 1979, the Sunni Kingdom of Saudi Arabia has been in a kind of religious-ideological competition with its northern neighbour, the Shia Islamic Republic of Iran. Both countries are relatively homogenous, though Saudi has a significant Shia minority in the Northern Borders region and about nine percent of Iran’s population are Sunnis – mainly Kurds and Turkmans located in the northwest of the country near the border with Turkey.
Add to this the fact that both powers are important regional players with huge cultural influence (soft power, if you wish) and massive oil reserves. Saudi Arabia can claim to be the birthplace of the Arab language and Arab culture (even though Egypt is more populous, is home to the great historic Muslim universities – and is much more cosmopolitan). Iran can claim to be one of the most ancient states in the world and its language, poetry, architecture and culture extend well into Central Asia and India. (The Indian Mughal emperors spoke Farsi, the language of Persia).
The countries of the Gulf Cooperation Council (GCC) outside Saudi Arabia (Kuwait, Bahrain, Qatar, the UAE and Oman) all ultimately defer to their Saudi big brother in matters of foreign policy. Iran has extensive clout in Afghanistan, Iraq, Syria, Lebanon, Yemen and even such ex-Soviet republics as Tajikistan – all countries with significant Shia minorities.
Resource-wise, everybody knows that Saudi Arabia is sitting on the largest oil field in the world – the Ghawar Field – which is currently producing about five million barrels per day with huge capacity for additional production. The Iranians possess no less than seven of the world’s greatest oil fields (as defined as having reserves of more than one billion barrels), though their output has been stymied hitherto by sanctions. Under the terms of the Iran nuclear deal of July 2015, whereby Iran agreed to eliminate its stockpile of medium-enriched uranium, Iran will be allowed to start exporting oil soon. Opinions differ on whether an incoming Republican administration would be able to reverse this deal which passed through the US Senate on a procedural vote last September.
So, just as the Saudi-inspired oil glut is pushing down oil prices, Iranian oil exports are about to increase global supply further.
Why should sensible investors in the UK, Europe or the US worry about a historic cleavage in Islam? Well, because these two rival Islamic powers might be on the verge of war – a war that could propel oil prices from their current lows potentially to record historical highs.
New year, new crisis. On 02 January 2016 Saudi Arabia executed 47 dissidents, of which 43 Shias, amongst whom Sheikh Nimr al-Nimr, the prominent Shia cleric who was an opponent of violent extremism. The government of Iran immediately reacted, announcing that there would be dire consequences. The Saudi embassy in Tehran was attacked. Saudi Arabia cut off relations with Iran. Its princely satellites, Bahrain and the UAE did likewise. Saudi-Iranian relations are now at an all-time low.
Now reflect that Saudi Arabia and Iran have been engaged in proxy wars for some time. In both Syria and Yemen, Saudi Arabia and Iran are backing opposing factions in accordance with their religious affiliations. In Syria, Iran, like Russia, has been a stalwart supporter of President Bashar al-Assad; while the Saudis are implacable opponents. In Yemen, Saudi forces, as well as those of other GCC countries, have been on the ground since March 2015, backed by air power. There, the Houthi insurrectionists have been supported by Iran.
Saudi Arabia and Iran represent opposite ends of Islamic orthodoxy and are natural antagonists. What is interesting in my view is that, for both sides, early 2016 – with oil prices low, with the US President well into his final year, and with Israeli influence on the US waning – would be a good moment to settle old scores. King Salman, despite his age, has demonstrated a desire to assert Saudi power. The Iranian ruling elite, facing elections in the spring, also feel a need to assert Iran’s position in the world.
Where would “the West” stand in the event of conflict? Saudi Arabia, of course, is an “ally”, to whom we sell arms, while Iran is an implacable enemy of Israel (mind you, Saudi is not exactly a friend of Israel either). If war breaks out political leaders in Washington, London, Paris and Berlin will want to put their hands over their eyes. In Moscow, however, this might look like an opportunity…
Most pundits think that low oil prices will continue throughout 2016. They could have overlooked something big.