http://www.jcpa.org/brief/brief004-13.htm
Institute for Contemporary Affairs
founded jointly with the Wechsler Family Foundation
JERUSALEM ISSUE BRIEF
Vol. 4, No. 13 28 December 2004
The Al-Qaeda Threat to Saudi Arabia's Oil Sector
Mordechai Abir
*
In the attack on the American consulate in Jedda on December 6,
for the first time, al-Qaeda mounted an assault on a "fortified"
American facility rather than attacking soft targets.
*
When it turned out that nearly all the victims were Muslims,
many Saudis, who were at first pleased by the U.S. humiliation,
strongly condemned al-Qaeda. Even the families of the four terrorists
killed in the consulate's courtyard were denounced by their kin.
*
On December 15, 2004, in an audio recording, bin Laden said "oil
prices should be at least $100 a barrel," and called upon Persian Gulf
militants to exert themselves to prevent the West from getting Arab
oil by attacking oil facilities all over the region. This was the
first time that al-Qaeda's leadership had openly divulged its strategy
of hitting the Western economy by disrupting oil supplies and causing
prices to skyrocket. The following day, NYMEX crude spiked by 5
percent to $46.28 a barrel.
*
While Saudi Arabia's Persian Gulf oil production facilities are
largely in Shi'a eastern Arabia, it is extremely difficult, if not
impossible, to totally prevent extremists ready to sacrifice their
lives in Allah's name from infiltrating Aramco's workforce, or
otherwise hitting weak spots in the oil industry. Even an abortive
attack on the Arabian oil network would seriously spike oil prices.
*
Although no longer a serious threat to the Saudi regime, the
remaining al-Qaeda cells have now been directed to target the region's
oil industry. Al-Qaeda's new "oil jihad" could threaten the regime's
stability and could undermine the supply of oil to the industrial
countries.
Saudi al-Qaeda Attacks a Fortified American Facility
The attack on the American consulate in Jedda on December 6 marked a
turning point in Saudi al-Qaeda's anti-Western (U.S.), anti-regime
operations. For the first time, Saudi mujahidin mounted an assault on
a "fortified" American facility rather than attacking soft targets,
such as expatriates' housing compounds or individual Western oil and
other experts. Not surprisingly, the highly paid experts, who stayed
in Saudi Arabia (but evacuated their families) despite the murderous
attacks on individual oil-related personnel in Yanbu and Riyadh, told
journalists that what happened in Jedda further emphasized Westerners'
vulnerability. Moreover, the Jedda attack illustrates that, despite
the heavy losses it has suffered since last year, Saudi al-Qaeda is
still capable of launching serious, although limited, operations in
the kingdom.
Yet the well-prepared attack on the U.S. consulate in Jedda by a cell
of only five terrorists demonstrates the success of Crown Prince
Abdallah's iron-fist policy that has led to the killing or
incarceration of most of Saudi al-Qaeda's leaders and veteran
militants. Indeed, Fayiz bin Awad al-Juhaini, said to be the Jedda
attack's leader, was only 28 (too young to have been an Afghani
veteran). Earlier, Juhaini served in the Al-Madinah mutawwa (morality
police) and was fired for "bad behavior."
Moreover, when it turned out that nearly all the victims of the
consulate attack were local or foreign Muslims, many Saudis, who were
at first pleased by the U.S. humiliation, strongly condemned al-Qaeda
for disrupting the kingdom's stability. Even the families of the four
terrorists killed in the consulate's courtyard (the fifth was wounded
and arrested) were denounced by their kin who, despite the custom, did
not hold a wake for them.
However, the U.S. embassy spokesman in Riyadh told the news media that
al-Qaeda's attacks on Western experts in Saudi Arabia, as well as
attacks on Saudi and American installations, were far from over, and
that attempts to sabotage the Persian Gulf oil industry should not be
ruled out, despite President Bush's assurance on December 7, 2004,
about the Saudi regime's stability and ability to participate in the
war against international terrorism.
Eighty Percent of the Saudi Budget Comes from Oil
According to Middle East Economic Survey,1 Riyadh's 2005 budget
(published December 8, 2004) is projected to be $74.7 billion, of
which 80 percent (about $61 billion) is to be generated by the sale of
oil (as in the past), assuming (for budgetary purposes) that the
average price for 2005 is $25 a barrel and production amounts to just
under 9 million bpd (last year's oil price projection left Riyadh with
an enormous surplus). The kingdom's revenue from all sources is
forecast to be about $100 billion in 2005 ($104.8 billion in 2004).
An incremental budgetary expenditure of $17.3 billion in 2004 was
largely allocated to strengthening "national security" and pay two
months' salary bonus to the military. In addition, the substantial
windfall that Riyadh enjoyed in 2004 (and is likely to garner in 2005)
enables the regime to "buy" its population's goodwill and finance job
creation for its numerous unemployed youth lacking proper training,
who abhor jobs related to manual work.
About a fourth of the national budget ($18.7 billion) is allocated to
the education sector. This is in line with Crown Prince Abdallah's
efforts to reform the religion-oriented education system and provide
Saudi youngsters with suitable skills to compete with expatriates for
available jobs. For some time, al-Qaeda has been cognizant that
Riyadh's increased revenue from oil was offsetting its endeavors to
undermine the regime. Yet, until recently it was careful not to
directly target the kingdom's oil industry, considered by Saudis to be
essential for their welfare.
Al-Qaeda's Strategy: Use Oil to Undermine the West
On several occasions since 2002, both Osama bin Laden and his deputy,
Ayman Zawahiri, have called on OPEC's Arab members to reduce the
supply of oil to the West and thus push oil prices up in order to
fight the "crusaders." As the guerilla warfare in Iraq has escalated
since the end of 2003, it has become increasingly evident that the
country's oil production has become a major target of the Iraqi/Arab
guerillas. The occasional murder of Western oil experts in Saudi
Arabia and attempts to hit targets related to oil production (such as
the attempt to bomb Iraq's three Persian Gulf terminals and the recent
attack on Aramco's Al-Khobar residential compound) were part of
al-Qaeda's strategy to undermine the Western economy.
On December 15, 2004, in an audio recording aired on an Islamic
Internet site, bin Laden attacked the Saudi regime for being "agents
of infidels," as well as driving the kingdom's population to poverty,
while helping enrich the U.S.-led, "anti-Muslim" West. Moreover, bin
Laden stated that "oil prices should be at least $100 a barrel," and
called upon Persian Gulf militants to exert themselves to prevent the
West from getting Arab oil by attacking oil facilities all over the
region. Bin Laden also encouraged all mujahidin "to stop the biggest
theft in history as the West has been buying oil at a cheap price."2
This was the first time that al-Qaeda's leadership had openly divulged
its strategy of hitting the Western economy by disrupting oil supplies
and causing prices to skyrocket. Consequently, on December 16, current
month NYMEX crude spiked by 5 percent to $46.28 a barrel.
Bin Laden's call for an "oil jihad" was followed by a web site message
from the Arabian Peninsula al-Qaeda to all the mujahidin in Arabia,
wherever they are, to focus on oil targets in their struggle against
the infidels and their Saudi allies.3 Yet some Western
politico-strategic analysts practically dismissed al-Qaeda's ability
to hit the heavily protected (by both Saudis and the U.S.) Persian
Gulf oil production facilities (other than in Iraq). They claimed that
even if the militants were to succeed in sabotaging an oil pipeline or
installation, it would not seriously impact the immense regional oil
production network. This is because al-Qaeda lacks the means and
support base in eastern Arabia, where the largely Shi'a population's
livelihood depends on the oil industry. Saudi Aramco has even claimed
that a flight of frightened Western experts would not undermine its
operations, as over 90 percent of its managerial and technical staff
are now Saudis.
Although Riyadh and its smaller Persian Gulf allies have greatly
beefed up their oil installations' security,4 it is extremely
difficult, if not impossible, to totally prevent extremists ready to
sacrifice their lives in Allah's name from infiltrating Aramco's
workforce, or otherwise hitting weak spots in the oil industry's
security complex. Moreover, even an abortive attack on the Arabian oil
network would seriously spike oil prices and temporarily slow oil
production. This is especially true if a terrorist attack were to be
aimed against sites such as Ras Tanura, the world's largest terminal,
or the huge Jubayl industrial city.
Al-Qaeda No Longer a Serious Threat to the Saudi Regime
It appears that the erosion of al-Qaeda's power and support in Saudi
Arabia has convinced bin Laden that his aspirations to bring down the
al-Saud regime in the near future are unrealistic. Indeed, official
Arab sources claim that the attack on the U.S. consulate in Jedda was
partly motivated by the persecuted jihadists' wish to win media
coverage to prove that they are still around5 and win back some of the
popular sympathy they have gradually lost since mid-2003.
Sa'ad al-Faqih, head of the London-based (pro-bin Laden) Movement for
Islamic Reform in Arabia (Islah), by using his television and radio
stations and web site, called his fundamentalist followers in Saudi
Arabia and other opponents of the Saudi regime, especially in Riyadh
and Jedda, to launch anti-Saud demonstrations in the kingdom on
December 15 (the same day that bin Laden's tape was aired). A similar
call for demonstrations by al-Faqih in October 2003 brought to the
streets of Saudi Arabia's major towns several thousand demonstrators,
who were mercilessly beaten or arrested by the security forces.
However, this time al-Faqih's call for demonstrations failed because
of changed circumstances and preemption by the regime, which
positioned large forces at the demonstrations' venues. Only a few
score diehards attempted to demonstrate and were forthrightly
dispersed or incarcerated.
The would-be demonstrators won no sympathy from passers-by. Indeed,
this time radical ulama distanced themselves from al-Faqih-initiated
demonstrations. Safar al-Hawali, the most respected militant alim, who
fiercely criticized the Saudi regime as early as 1981 and was
considered bin Laden's mentor, told journalists, "Reform is needed,
but not the al-Faqih way." Indeed, what al-Hawali said about al-Faqih
could be considered a rebuke to al-Qaeda's operations in Saudi Arabia
and another sign of the waning support for it in the kingdom.
Saudi al-Qaeda's power and support base have suffered grave blows
since mid-2003. Nevertheless, it is still active, although on a more
limited scale, and its dispersed cells are led by the remaining
"Afghani" veterans and some younger fanatics, the product of the
Wahhabi education system and the increasing financial hardship
experienced by the Saudi masses since the late 1980s.
Although no longer representing a serious threat to the regime, the
remaining al-Qaeda cells have now been directed to target the region's
oil industry and not just Western experts employed by Aramco, or
institutions related to it. Thus, al-Qaeda's new "oil jihad" could
threaten, to some extent, the Saudi economy and the regime's
stability. Indeed, it could also undermine the supply of oil to the
industrial countries and interfere with their economic growth.
Notes
1. Middle East Economic Survey, December 16, 2004.
2. Al-Quds al-Arabi (London), December 17, 2004.
3. AP and Financial Times, December 19, 2004.
4. Dow Jones, December 17, 2004.
5. Al-Sharq al-Awsat (London), December 8, 2004.
Mordechai Abir is a Fellow of the Jerusalem Center for Public Affairs
and Professor (Emeritus) of Islamic and Middle Eastern Studies at the
Hebrew University of Jerusalem. His books include Saudi Arabia:
Society, Government and the Gulf Crises (1993) and Saudi Arabia in the
Oil Era: Regime and Elites: Conflict and Collaboration (1988).
Dore Gold, Publisher; Yaakov Amidror, ICA Program Director; Mark
Ami-El, Managing Editor. Jerusalem Center for Public Affairs
(Registered Amuta), 13 Tel-Hai St., Jerusalem, Israel; Tel.
972-2-5619281, Fax. 972-2-5619112, Email: [EMAIL PROTECTED] In
U.S.A.: Center for Jewish Community Studies, 5800 Park Heights Avenue,
Baltimore, MD 21215 USA, Tel. (410) 664-5222; Fax. (410) 664-1228.
Website: www.jcpa.org. © Copyright. The opinions expressed herein do
not necessarily reflect those of the Board of Fellows of the Jerusalem
Center for Public Affairs.
The Institute for Contemporary Affairs (ICA) is dedicated to
providing a forum for Israeli policy discussion and debate.
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