Oil reached a new record high yesterday in New York–$62.30 a barrel—on news that Saudi Arabia’s King Fahd died. The news wasn’t exactly a surprise (the king had been ailing for 10 years), nor did it set off a power struggle (Crown Prince Abdullah, who has been the kingdom’s defacto ruler for a decade following the king’s debilitating stroke in 1995, assumed control). But today’s stability masks the potential for unrest in the not-too-distant future.

“This is the largest royal family in the world and there will be a struggle as princes compete for positions of power,” Mai Yamani, who watches the Middle East from her post at the London-based research center Chatham House, tells Bloomberg News.
The Saudi kingdom, home to a quarter of the world’s known oil reserves, is a powder keg waiting to explode. When it explodes, and by how much is the question. To be sure, the heavy hand of the royals has kept the would-be revolutionaries from lighting the fuse. How long can they keep it up? Indefinitely? Perhaps. Nothing less has been promoted by the cozy relationship that Fahd engineered in the early part of his 23-year reign, and that more or less continued under Abdullah for the past decade.
But Abdullah, who’s in his early 80s, and his named successor, half brother Prince Sultan, who’s currently defense minister, is 77. Amid this backdrop, the winds of change, for both good and ill, are blowing. Calls for both more democracy in some quarters, and a return to more conservative tones of Islam in others are swirling about on the Saudi peninsula. Both represent a threat to the established order.
On the conservative front vying for future power is Prince Nayef, the kingdoms’ interior minister who has a history of trying to undermine Abdullah’s reform efforts in the past. By some account, Nayef is now in the running for the third position of deputy prime minister in the Saudi royal hierarchy, in which case he would become next in line to become king after Sultan.
“The jockeying for the number three slot,” the Washington Post reports today, “hinges on one question of particular significance for the United States: whether Prince Nayef , a younger full brother of Sultan and Saudi Arabia’s often outspoken and controversial interior minister, will try to get in line for the throne. Believed by Western analysts to be about 72, Nayef has controlled the kingdom’s police and internal security forces for three decades, building a powerful political empire now largely managed by his son, Mohammed bin Nayef.”
This much, at least, is clear: the stakes are nothing short of huge for the West, and Washington in particular. As such, watching the courtiers jockey for power in the months and years ahead promises to be something more than a parlor game.
“Saudi Arabia is a real thorny problem for Washington and other Western governments,” Rosemary Hollis, head of the Middle East Programme at the Royal Institute for International Affairs (Chatham House) in London, tells BBC News. “Since the attacks by al-Qaeda within Saudi Arabia, Western governments have given serious consideration to the trends in the country. They want more reforms, in the school curriculum and in the concentration on the conservative Wahabi form of Islam, for example, but if reform is the answer, how far can you go before it turns into instability?”
More than a few minds are now focused on just that question in the wake of Fahd’s demise. Energy Intelligence analyst Jane Collin observes via BusinessWeek: “The question is who will follow them as next in line to become absolute monarch of the world’s biggest oil producer. As in Kuwait, where both the ruler and his heir are in their late 70s, there is no established system for handing over to a younger generation.” As a result, “the potential for bitter infighting is already triggering concern about future stability in the oil-rich region.”
For the moment, there’s not much for the markets to do other than to bid up the price of oil as a hedge against the risk of future Saudi political instability. But the current spike to a record may be excessive if the buying is based solely on news about the Saudi royals. “The new Saudi king will most likely carry straight on with the foreign and oil policies he conducted in the last decade as de facto monarch,” the risk intelligence firm Debka counsels. “Abdullah starts his reign with major assets, bonanza revenues from high oil prices and the understandings on oil and Middle East policies he established with US president George W. Bush at Crawford, Texas, in the spring of 2005.”
For the moment, that’s enough to pass for stability in the House of Saud.