Going Global: Saudi Arabia and Iran
The falling out of Saudi Arabia and Iran
The recall of Iranian and Saudi diplomats was not a question of how or why, but when. In this case, it was the execution of a Shi’a cleric in Saudi Arabia that broke the camel’s back. It was the death of Nimr al-Nimr, a Shiite cleric who was critical of the Saudi government, that led to protests in Tehran to storm the Saudi embassy and set it on fire.
This comes only a few months after the September stampede at Mecca, which according to the Associated Press killed over 2,200 people, while Saudi Arabia says it was closer to 700, with 900 injured. Two Iranian diplomats were killed in the incident, and over a thousand protesters showed up at the Saudi embassy in Tehran. The Iranian government blamed Saudi Arabia for mismanagement.
The relationship between both countries has been fairly sour, especially after the Iranian revolution in 1979, which flipped Iran from being a U.S. ally to an enemy, leaving Saudi Arabia as one of the more powerful allies in the region.
While neither country has formally gone to war, they have engaged each other in various proxy battles over the last several years. Iran and Saudi Arabia supported opposing groups in Lebanon, Syria, and most recently Yemen.
Many people will try to paint this conflict as “Shi’a vs. Sunni,” but it’s much more complicated than that. Saudi Arabia is successfully framing the conflict in this way, but what often isn’t mentioned is that roughly 10 per cent of Saudi Arabia is Shiite, and many of them are concentrated in the western part of the country.
It should also be noted that in the background, both countries are undergoing critical economic changes. Iran has seen diplomatic successes in removing several trade barriers and sanctions in exchange for dropping their nuclear program. Part of this means that they can start selling their oil to more countries, which of course increases the supply.
Saudi Arabia is seeing a lot of economic slowdown, which is of course linked to a dropping global demand for oil. China, for instance, has been demanding less and less oil as the years go by. Their country is slowing down development, and moving away from oil and coal and toward nuclear and renewables. The same goes for Russia, Brazil and India. Canada the U.S. have shown to be capable of extracting their own oil, but only if the price is high enough.
This creates a very awkward situation for Saudi Arabia. Usually lower prices would help them, but the world is changing. Since Saudi Arabia is overwhelmingly dependent on oil, many pundits have speculated that aggressive changes to the oil economy could bankrupt the country, with the IMF estimating that they only have five years of cash reserves at the current oil price.
Speaking of oil prices, several pundits have made the claim that a hypothetical war between Saudi Arabia and Iran could cause the price of oil to exceed $200 per barrel. This would have the side effect of making the Canadian dollar incredibly valuable and eliminate unemployment in Alberta, and I’m only being slightly facetious. After the Middle East and Venezuela, Canada has the largest oil reserves in the world.
However, with the dramatic cut in diplomatic ties, there is further speculation as to whether or not a full military conflict could take place, but it still seems unlikely. Both countries already wage proxy wars with each other, and a possible war would put the United States in an awkward position, given their progress with Iran and their historic relationship with Saudi Arabia.
When it comes to military power, Iran has a larger reserve of soldiers, while Saudi Arabia has superior technology which they have purchased from the United States (and maybe Canada). In addition to this, both countries are very different, geographically speaking. Saudi Arabia is, overall, a flat expanse, which is difficult to defend. Iran is much more defensible, with an expanse of mountains along the south-western region of the country. Both countries are separated by a mere 200 kilometres of water.
