Geo-Strategy #4: Saudi Arabia's Trump Card Against Iran

Okay, let's start class. Let's review where we are. We are discussing or exploring why the United States would want to invade Iran, and so far we have two good reasons. The first good reason is called the Israel Lobby. There are in the Israel Lobby millions of Christian Zionists who believe that a conflict in the Middle East, especially between Israel and Iran, will bring Jesus back to Earth. They want their God, Jesus, to return to Earth, and they believe that a war in the Middle East will force him to return. That's the first reason. Second reason is the idea of empire. America is an empire, and as an empire it has a lot of privileges. For example, it can just print as much money as it wants, US dollars. Right now America is $34 trillion in debt and the debt is growing by a trillion dollars every two months. America can do this as long as it is an empire, as long as people fear America. But as we discussed last class, with Putin's invasion of Ukraine people are now starting to rebel against the empire, and therefore America must demonstrate it still is the military hegemon of the world, and therefore it can do this by invading Iran.

Today we look at the third and final force driving conflict in the Middle East, and it's really the conflict between Saudi Arabia and Iran. Most people think that Iran's major enemy in the Middle East is Israel. In fact, Iran's major enemy is Saudi Arabia. These two are bitter rivals, and to understand why we have to look at their history. So the year 1979. At the start of 1979, Saudi Arabia and Iran are good friends. Let's look at a map of the Middle East. Iran is here, it's next to Iraq, Saudi Arabia is down here, then you have Yemen here, Oman, this is the Strait of Hormuz, and this is the Suez Canal, and the Red Sea basically. In 1979 Saudi Arabia and Iran were very good friends. They had a lot of similarities: they were both monarchies, they were ruled by a king, they were secular, they relied on American power to defend themselves, and they were both oil exporters, both very prosperous oil exporters. But then in 1979 a political earthquake radically changed the landscape of the Middle East. In 1979 there was a bottom-up revolution called the Islamic Revolution. Before 1979 there was a general consensus, agreement, in the Middle East that religion and politics would be separated.

But in 1979 the people in Iran demanded three things. First, they will not be ruled by a king. That's the first demand. Second is that the US should not interfere in domestic politics. Remember that before, the king, the Shah, was supported by the American military. And the third demand is that as a Muslim people, as people who believe in the Islamic religion, the government should be focused on Islamic law. So in the referendum 98% of the people of Iran voted to install an Islamic Republic to replace the monarchy, and this was completely unexpected, and this caused an earthquake throughout the Middle East.

In November, of 600 religious extremists tried to besiege Mecca. Mecca is the holiest city in the Islamic religion because it's the birthplace of the Prophet Muhammad. 600 extremists tried to take the city over and demand three things: that the Saudi Arabian monarchy abdicate, that the United States should remove itself from the internal affairs of Saudi Arabia, and that Saudi Arabia should be governed by Islamic law. Now this revolt was crushed by the military, but from that day on Iran and Saudi Arabia became bitter enemies, because they were both trying to install their vision of Islam on the Middle East.

So this rivalry between Iran and Saudi Arabia took three forms. The first form is religious. Even though they're both Muslim countries, Islamic countries, they have different versions of the religion. Saudi Arabia is Sunni and Iran is Shia. Now you may ask what the difference between these two different versions of the religion is, and the answer is no one actually knows, it's a very complicated issue. The major difference is this. In 610 the Prophet Muhammad, in Medina, in the city of Medina, he had a vision to found a new religion called Islam, and he spread this religion throughout the Middle East, throughout the Arab world, forever transforming the Middle East. When he died, there's a problem of succession: who would succeed the prophet as the leader of the religion? The Shia people believe that only people of Muhammad's bloodline can be the leaders of the religion. The Sunni disagreed and said that anyone who proved himself competent and faithful to the religion could be the leader. And so for hundreds of years these two groups, the Sunni and the Shia, fought a war over the succession, and this led to a bitter rivalry that's lasted to this day.

Now the majority of people in the world, 80%, are Sunni. The majority of Muslims in the world are Sunni, 10% are okay. So why this is important is that Saudi Arabia is a Sunni and Iran is a Shia country, and at the time of the revolution Iran dedicated itself, committed itself, to spreading the Shia throughout the world. Now Saudi Arabia considers itself the leader of the Islamic world because it is home to both Mecca and Medina, which are the two holiest cities in the entire Islamic religion. As you may know, there's a requirement that as a Muslim you must take a pilgrimage to Mecca and Medina once in your lifetime. Because Saudi Arabia controls Mecca and Medina, that's really the source of Saudi Arabia's authority over the Islamic world. Iran argued that because Saudi Arabia is ruled by a king, that's anti-Muslim, and because it is defended by the US military, that's also anti-Muslim, Saudi Arabia is a heresy. So Iran has dedicated itself to subverting Saudi Arabia's authority. Does this all make sense so far?

Now Saudi Arabia is Sunni and it practices the most extreme form of Sunni religion, called Wahhabism.

Wahhabism. In 1744 the Wahhabis, which again are the most extreme Islamic group, made an alliance with the Al Saud family of Saudi Arabia, and the agreement was this, that Wahhabism would become the national religion of Saudi Arabia and the Wahhabis would swear allegiance to the Al Saud family. But in the 1930s oil was discovered in Arabia. In fact, Saudi Arabia proved to have the most valuable oil resources in all the world, and at that time, as the world was modernizing, oil was becoming more and more important, and so that made Saudi Arabia extremely wealthy. As it became more and more wealthy, it tried to become more Western, more secular, more progressive, more modern, which brought it into conflict with the Wahhabis. Now Wahhabism accounts for 20 to 40% of all the people in Saudi Arabia, so it is a very significant group. More important, Wahhabi people tend to be extremely fanatical. For example, in 1979 the people who laid siege to Mecca were Wahhabis, and Wahhabis were also responsible for terrorist attacks against tourists, against foreigners in Arabia. So Saudi Arabia has always had this problem with the Wahhabis, and the way that Saudi Arabia has tried to resolve the conflict is to export the religion of Wahhabism throughout the world.

For example, Osama bin Laden was a Saudi citizen responsible for spreading Wahhabism in Afghanistan, and that's what al-Qaeda is. So Saudi Arabia is trying to export Wahhabism, Iran is trying to export the Shia religion, and so they come into conflict with each other. So the first source of tension between Iran and Saudi Arabia is over religion.

Second is economic, and what that means is that both countries are oil exporters. In fact, Saudi Arabia is completely reliant on oil for its economy. 40% of Saudi Arabia's GDP is based on oil exports. Saudi Arabia is the number one oil exporter in the world. 75% of government revenues come from its oil exports. In other words, Saudi Arabia does not actually collect taxes from its citizens, it just sells oil. Iran also sells oil, it's the number four oil exporter in the world, but it's less reliant on oil because it has a diversified economy, meaning that it has very strong human capital. It has a very well educated population that does all sorts of different activities, science, art, education. So Saudi Arabia for the longest time has been trying to control the price of oil in order to maximize profits.

For example, it wants to cut back production in order to increase the price of oil, which will increase profits, but Iran often doesn't cooperate, because Iran is trying to sell as much oil as possible in order to boost its economy. So there's economic conflict between these two countries.

And the third and final conflict is geopolitical, and geopolitical means that both countries are trying to exert as much influence as possible over the Middle East. Now Iran is trying to exert influence over the Middle East because after the revolution in 1979, many countries, including Saudi Arabia and the United States, encouraged Iraq to invade Iran, and this invasion, called the Iran-Iraq War, lasted eight years and it cost the lives of millions of Iranians. From then on Iran has adopted a policy of aggressive intervention in the Middle East in order to distract the United States and Israel. For example, in Israel there are two groups opposing Israel, Hamas and Hezbollah, and they're both financed and supported politically by Iran, and the point of doing this is to distract Israel. Now Saudi Arabia is trying to exert influence over the Middle East because as number one oil exporter, it needs to control shipping lanes.

It needs to control this area and this area, the Strait of Hormuz and the Suez Canal, and 40% of all the world's oil passes through these two, and they go mainly to East Asia, China, South Korea and Japan mainly.

Because of these tensions, Iran and Saudi Arabia have fought three proxy wars. They fought three shadow wars. The first is in Iraq. In Iraq, as you know, in 2003 America invaded Iraq and destroyed the country, and after destroying the country there's a power vacuum, and so basically Iran came in and tried to take over the country, and it could do so because two-thirds of the population were Shia and therefore they had affinity with Iran, and a third were Sunni. What happened was that to counter the Iranian influence in Iraq, Saudi Arabia started to finance the one-third of the Sunnis against the Shia there. So there was a very violent civil war fought in Iraq after the invasion. Many people also believe that Saudi Arabia is responsible for the financing of the Islamic State, or ISIS, because ISIS really hates the Shia religion. But over time, because Iran is has been so much more effective in projecting its power than Saudi Arabia, basically Iran now controls much of Iraq.

So in this first war Iran defeated Saudi Arabia.

Then they fought another war in Syria. Syria's leader Assad faced a rebellion, and Saudi Arabia, America, Israel supported the rebels against Assad, and Iran came in to support Assad, as well as Russia, and over time Assad was able to crush the rebellion. So in the second proxy war Iran won as well. Now there's another proxy war in Yemen, and it started in 2016. The wars in Iraq and Syria were important to Saudi Arabia but they didn't really threaten Saudi Arabia, but this war in Yemen did threaten Saudi Arabia. For the longest time Saudi Arabia supported the Yemen political leadership, and then there was a rebellion by the Houthis. The Houthis were Shia villagers who lived in the mountains, and they were trying to overthrow the government, and Saudi Arabia was afraid that the Houthis would become friends with Iran. So Saudi Arabia launched a massive invasion of Yemen. It was 150,000 Saudi Arabian troops, they had war planes, they were backed by the most advanced American weapons and technology.

They also had a coalition of about 30 nations, including Egypt and the UAE. Saudi Arabia named this operation Decisive Storm, which sounds like Desert Storm, and the strategy they used is what we call shock and awe. Shock and awe is basically we have so many bombs, we have so many airplanes, we have so many soldiers that we can in about a week's time destroy you. So go in, go fast, be decisive, destroy your enemy. Unfortunately for Saudi Arabia this did not work, and the reason why is, first of all, the Houthis were in the mountains and so your bombs didn't really stop them. In fact, all your bombs did was make them really angry, because with your bombs you were killing civilians, so you're basically uniting the entire population against you. That's the first problem. Second problem is that the Houthis are in the mountains but Saudi Arabia has oil fields, and guess what, guys, it's really, really easy to blow up oil fields. That's what the Houthis were doing. They were sending these cheap drones, they might cost $1,000, $10,000, and they would blow up oil fields and ports. Saudi Arabia has another problem. Saudi Arabia has no fresh water. It's In the desert, it is a desert, no water, guys, no rivers, so it relies entirely on plants.

This is extremely impressive technology. It takes salt water, sea water, and turns it into fresh water. It's very impressive, but it's all on the coast, and guess what, guys, the coast. So Iran can blow these plants, and then the Houthis can blow these plants as well. So Saudi Arabia basically lost the war because the Houthis could inflict massive economic damage on Saudi Arabia.

So from this war Saudi Arabia learned three things. The first thing it learned is that if it wants to defeat their enemies, the Houthis, the Syrians and the Iraqis, they also need to be able to defeat Iran. That's the first thing they learned. Second thing they learned is that their economy is extremely vulnerable to attack. At any point Iran, with its missiles and drones, can destroy the entire Saudi Arabian economy. It can easily blow up all the oil fields and the plants. So the third thing that Saudi Arabia learned from all this is, we really need America to fight Iran for us. In the long term that's the only way we're going to survive as a nation. We need to defeat Iran, and we can't do it by ourselves, we need America to do it for us.

Unfortunately for Saudi Arabia, in 2001 9/11 happened. 15 of the 19 hijackers were citizens of Saudi Arabia, which meant that America was very unhappy with Saudi Arabia. Americans didn't like Saudi Arabia. Americans also knew that there were a lot of human rights abuses in Saudi Arabia. The other thing that happened is in 2003 America invaded Iraq. Saudi Arabia tried to exert as much influence as possible in Washington DC to stop the war, because they knew that if America invaded Iraq it would make Iran more powerful. Now as you know, Saudi Arabia could not stop the war.

In 2008 Barack Obama came into office, and Barack Obama's understanding of the world was that the Middle East is a complete mess and it's hopeless, I don't really want to deal with the Middle East, plus China is rising, the main threat to American power in the future will be in East Asia. So he proposed something called the Asia pivot, which is to transfer American military resources from the Middle East to East Asia to counter the threat of China. But to do that you needed to reduce tensions in the Middle East, and so in 2015 he made a deal with Iran called the Iran nuclear deal.

The deal was basically Obama said to Iran, listen, I know you're trying to develop nuclear weapons, so what we're going to do is, if you promise to not develop nuclear weapons, we will lift economic sanctions on you so that you can prosper, and Iran said yes. And this really scared Saudi Arabia, because if America leaves the Middle East and brokers a peace with Iran, then Saudi Arabia would be extremely vulnerable. So Saudi Arabia became very, very desperate, its very existence was threatened.

Also, the economic outlook for Saudi Arabia was not that great. Remember the entire economy is dependent on oil, but guess what, guys, oil is a finite resource. Eventually you're going to run out of oil. Now if you're optimistic you'll be like, well, Saudi Arabia would run out of oil in about 7 years' time or 80 years' time, but there are also some people who believe that Saudi Arabia will run out of oil in about 10 years' time, and if Saudi Arabia has no oil then its entire economy collapses. Then you also have a problem with global warming, climate change. You also have a problem with the entire global economy slowing down, and therefore the demand for oil is decreasing.

So the economic outlook for Saudi Arabia is extremely grim.

And then in 2017 Saudi Arabia appointed a new leader called Mohammed bin Salman, the Crown Prince, who is called MBS, and MBS promised to be a new leader. He was young, he was progressive, he wanted women to drive, he wanted young people to go to the movie theater, and he proposed a new vision for Saudi Arabia, Vision 2030. But MBS's most important achievement is that he became friends with the new president, Donald Trump. In 2016 Donald Trump became president of the United States, and MBS decided that this is an opportunity for Saudi Arabia to reset relations with America. Trump's first trip outside the United States was to Saudi Arabia. That was the first achievement. Second achievement is that MBS became best friends with Trump's son-in-law Jared. Jared Kushner was Trump's Middle East advisor, and his job was to bring peace to the Middle East, mainly between Israel and the Arab countries, and to that extent Kushner did a great job, because MBS helped him. So his major achievement is something called the Abraham Accords.

The Abraham Accords is just to establish peace between Israel and the Arab countries so that they can unite against Iran together. So MBS was looking very good.

But then in 2018 he did something that scared the world. MBS was a visionary, he had a plan for where to take Saudi Arabia, he wanted to modernize Saudi Arabia, but he was also young, he was a tyrant, he did not like people who criticized him. There's a journalist named Jamal Khashoggi, who worked for the Washington Post and who was a permanent resident of the United States. He was a Saudi national, and MBS had him killed, and this caused an international uproar. The CIA, the US government, conducted an investigation and they determined it was MBS who ordered the assassination. Trump protected MBS.

And then the most important thing that Trump did was in 2020 Trump ordered the assassination of a man named Soleimani, who is considered to be the second most powerful man in Iran after the Ayatollah, the supreme religious leader of the country. It is Qasem Soleimani who was responsible for Iran's policies in the Iraq war, the Syria war and in the Yemen war.

So from the perspective of Saudi Arabia, Qasem Soleimani is Public Enemy Number One, he is the greatest threat to Arabia. Now before, America had many opportunities to assassinate Qasem Soleimani. George W. Bush had the opportunity, Barack Obama had the opportunity, and both believed that doing so would cause basically World War III, because if you kill the number two leader of Iran, Iran would have no choice but to go to war with you, and that's why they both refrained from killing Qasem Soleimani. In fact, when Trump made the decision to assassinate Soleimani, the military was stunned. They couldn't believe this was happening.

So how does this happen? For some time there's some conflict between US soldiers and Shia militia in Iraq, and the Pentagon felt it had to act. In these situations they have to go to the president and present options to the president of how best to respond, and usually the Pentagon will design the choices so that the president does what the Pentagon thinks is best. An example is, if I'm the military and I go to Trump, I give you three choices. The first choice is, let's do nothing.

Two is what you should do. And three is, let's blow up the world. So when I present these three options to you, you, as a president being wise and strategic, will obviously always pick option two, what you should do, what the military suggests you should do. Unfortunately, in this instance Trump chose option three: let's blow up the world, guys. And so they assassinated Qasem Soleimani.

So in other words, it is very likely that if Trump stayed a second term, the United States would have gone to war with Iran, given how things were. MBS was so happy about all this that he once bragged privately to a friend that, oh, Jared Kushner, Trump's son-in-law, the man responsible for all Middle East policies, well, he's in my pocket, meaning I own him. And the evidence that suggests this is that after Trump left office, after Jared Kushner left office, Jared Kushner set up a private equity fund and MBS and the Saudi government invested $2 billion in into the Does that make sense? We don't know this for sure, but it seems like Trump is doing exactly what the Saudis want, which is to inflame tensions with Iran.

And this suggests that if in November Trump wins a second term, it is very possible that Trump will declare war on Iran or at the very least continue tensions with Iran, which will very likely lead to World War III. So in that respect the election in November, whether or not Trump comes back into office, is one of the most consequential elections. Does that make sense, guys? Any questions? Anything you want me to clarify before we end class? Okay, so what we will do next class is figure out if Trump will win in November, and I will make the argument to you that it is almost certain, very likely, that he will win in November. So we will examine why next class.