181. Intelligence Memorandum Prepared in the Central Intelligence Agency1

RP M 79–10053

THE IMPACT OF IRAN ON SAUDI ARABIA: SECURITY CONCERNS AND INTERNAL REACTION [classification and handling restriction not declassified]

The collapse of the Shah’s position in Iran and the recent surge in South Yemeni attempts to subvert North Yemen are accelerating a Saudi Arabian re-examination of its regional security position, and the status of its relations with both the US and the USSR. The Saudis’ requests for a US defense commitment [less than 1 line not declassified] to plan security contingencies is designed to test US intentions and may well mark a watershed in US-Saudi relations.

If the Saudis consider the US response to their security concerns inadequate, they probably will move toward a more non-aligned political posture, and show less willingness to accommodate US interests in the energy field or to support US-sponsored Middle East peace efforts. The heretofore unthinkable—reaching some kind of accommodation with the USSR—also appears to be a possibility. The events in Iran already appear to be strengthening the position of conservatives within Saudi Arabia—who ironically are among the most critical of US policies—and this could contribute to strains in US-Saudi ties regardless of how the US reacts to Saudi security concerns. [classification and handling restriction not declassified]

The Soviet Threat and Regional Security [classification and handling restriction not declassified]

Saudi reaction to Iranian developments is heavily colored by the conviction that the USSR is successfully engaged in a strategic effort to encircle Saudi Arabia and the Persian Gulf oilfields, and that the US, ignoring two years of Saudi warnings, does not appreciate the urgency of the situation or, alternatively, lacks the will to defend its interests in the region. The Saudis believe there are both strategic and economic motivations behind the Soviet drive: to be in a position to threaten Western access to Persian Gulf oil, and to ensure their own future access to Gulf oil. The Saudis, particularly Oil Minister Yamani, [Page 588] firmly believe that the USSR will be short of oil in the mid-1980s. The US Embassy in Jidda reports that the Saudis also accept the results of a study they commissioned that indicates the cost of development of oil resources in Siberia over the coming decade will be astronomical, making it cheaper for the Soviets to buy Saudi oil than to develop their own.2 [classification and handling restriction not declassified]

Over the past two years, the Saudis have cited Soviet involvement in the Horn of Africa, the coup in Afghanistan, and increased Soviet activity in South Yemen as evidence of Soviet intentions. While most Saudi leaders do not believe the Soviets were involved in the Shah’s downfall, they all believe events in Iran have drastically altered power arrangements in the region and make the threat of Soviet encirclement even more immediate. The Saudis never cared for the Shah’s self-proclaimed role as policeman of the Gulf, but they recognize that he had been a force for stability and anti-radicalism in the region. The Shah was the principal supporter of Saudi Arabia’s anti-Soviet policy in the Horn of Africa and his willingness to commit thousands of troops to Oman in the early 1970s was crucial to ending a Marxist guerrilla war on the Arabian Peninsula. [classification and handling restriction not declassified]

The Saudis now worry that the USSR, through South Yemen, already is in a position to bring about chaos in North Yemen and to destabilize Oman. They will become more alarmed as the remaining Iranian troops are withdrawn from Oman. The Saudis fear that if hostile regimes were established in North Yemen or Oman, the USSR would encourage them to promote trouble within Saudi Arabia itself. [classification and handling restriction not declassified]

The US Connection: How Firm an Ally? [classification and handling restriction not declassified]

Intense discussions among Saudi foreign policy decision-makers over Saudi Arabia’s position in the region and its relationship to the US and the USSR have been under way for over a year. In talks with US officials, the top Saudi leadership—Crown Prince Fahd, Defense Minister Prince Sultan, National Guard Commander Prince Abdallah, Foreign Minister Prince Saud, and intelligence chief Prince Turki—has emphasized the US interest in the security of the Arabian Peninsula and has tried to promote closer US-Saudi cooperation to that end. However, the failure of the US to provide military support last year to the Somalis during the Ogaden war and US hesitation to go through with the F–15 jet sale caused Saudi leaders to question US will and [Page 589] capability to oppose the spread of Soviet influence and to promote stability in the region. [classification and handling restriction not declassified]

Several recent developments have further shaken Saudi confidence in the US. The Saudis do not specify what they think the US should or could have done to save the Shah, but [less than 1 line not declassified] top Saudi leadership is “bitterly unhappy” over what it sees as a very inadequate US response to the Iranian crisis. The Saudis now are deeply worried about how the US would react to a crisis of similar proportions in Saudi Arabia. [classification and handling restriction not declassified]

In addition, the US Embassy in Jidda reports that the Saudis, reacting to the change in US policy toward the Republic of China on Taiwan, wonder if the US will rely similarly on vague Soviet promises of good behavior in the Persian Gulf region instead of confronting the “Soviet challenge.” The embassy also speculates that some Saudis may wonder if the US sees Mexico as an alternate source of energy, reducing the need for a close relationship with Saudi Arabia. [classification and handling restriction not declassified]

The Saudis have acknowledged to US officials that they cannot defend themselves, North Yemen, or Oman. Traditionally they have assumed the US would support them in a crisis. They now believe the threat is looming, and want to test that assumption before it is too late. [classification and handling restriction not declassified]

Request for Defense Commitment [classification and handling restriction not declassified]

Foreign Minister Prince Saud and intelligence chief Prince Turki met with the US Ambassador [less than 1 line not declassified] in Jidda in mid-January.3 Saud asked for specific US commitments to defend Saudi Arabia, North Yemen, and Oman from any threat from the USSR or its ally, South Yemen. [3 lines not declassified] that the Saudi requests are a carefully thought out effort to test US strategic intentions in the region, and that the US response will critically influence the direction of Saudi foreign policy for the next several years. [classification and handling restriction not declassified]

[2 paragraphs (18 lines) not declassified]

Saudi Alternatives: Non-alignment or Accommodation with the USSR? [classification and handling restriction not declassified]

If the Saudis are not satisfied with the results of their testing and probing of US intentions—and their expectations are high—they may [Page 590] well decide they must move away from close identification with the US, towards a more non-aligned position. We have already seen Saudi Arabia distance itself from Egypt and the US on the Middle East peace process, and align itself more closely with the majority of Arab states who argue that the Camp David accords do not go far enough. They may move even closer to the rejectionist position. [classification and handling restriction not declassified]

As unpalatable as it would be to the Saudis, they might also decide they had to reach an accommodation with the USSR. [4 lines not declassified] The US Embassy reports that Iraq—with whom the Saudis have recently improved their relations—may have pressed the Soviet option with the Saudis. [classification and handling restriction not declassified]

The Saudis obviously have no illusions about Soviet intentions. The Saudis would deal with the Soviets only because they despaired of US ability or willingness to stop the Soviet encirclement of the Kingdom, and as a way to try to buy time to slow the Soviet advance. [classification and handling restriction not declassified]

A Saudi accommodation with the Soviets would not necessarily mean the establishment of diplomatic relations. It would probably mean a cooling of relations with the US and Saudi acquiescence to the Soviet presence in South Yemen and the Horn of Africa. It could mean trade ties and perhaps an agreement to supply some oil, probably at the expense of supplies to the US, Western Europe, or Japan. [classification and handling restriction not declassified]

Internal Reaction to Iran [classification and handling restriction not declassified]

The Iranian revolution is also beginning to have some impact on Saudi policies closer to home. [5 lines not declassified] the Saudi Government would view an Iranian Government headed by Ayatollah Khomeini with “extreme misgivings.” [classification and handling restriction not declassified]

Of more immediate concern to Saudi security authorities, however, is the large Shia minority in Saudi Arabia’s Eastern Province of al-Hassa. Saudi Arabia’s Shias traditionally have been discriminated against and largely ignored by the Sunni central government. Large numbers of Shias have found work in the oilfields, and are employed by ARAMCO; they participated in labor strikes and unrest which periodically erupted among Saudi oil workers in the 1950s and early 1960s. [classification and handling restriction not declassified]

Because of the years of discrimination and neglect, Saudi security authorities admit they know very little about the political thinking of the Shia minority or how Iranian developments may be affecting that population. They have discovered that the large numbers of Shias [Page 591] employed by ARAMCO are widely dispersed throughout the corporation and have access to all sensitive oil installations. The security authorities have reviewed security at the oil installations, concluded it is very weak, and not subject to quick improvement. [classification and handling restriction not declassified]

Two other recent incidents in Saudi Arabia appear related to Iranian developments. They take on added significance because they were non-official and probably caused the government embarrassment. [classification and handling restriction not declassified]

On 19 January, the imam or religious preacher, at one of Riyadh’s largest mosques delivered a strong public attack on the Shah of Iran, and on Egyptian President Sadat and Moroccan King Hassan for their support of the Shah. The imam accused the Shah of being an evil, corrupt, and base ruler who deserved punishment for having led Iran away from Islam under the guise of modernization. He described Sadat and Hassan as equally or more corrupt than the Shah, and called on the Egyptian and Moroccan people to overthrow them. [classification and handling restriction not declassified]

This is the first incident in memory in which a Saudi mosque has been used for a violent and public attack on Muslim leaders, particularly monarchs. Saudi authorities are concerned that the incident not set a precedent. They are acutely aware that the charge of corruption can be leveled at many members of the Saudi royal family. Corruption among some members of the royal family, including senior princes, is widely known and resented within Saudi Arabia. [classification and handling restriction not declassified]

The imam’s sermon will spur renewed efforts by the royal family to improve its image. Ex-Deputy Defense Minister Prince Turki ibn Abd al-Aziz (not to be confused with the younger Prince Turki, chief of intelligence), was forced to resign last fall because of blatant corruption in military purchases, some from major US corporations, and because of a marital scandal. [6 lines not declassified]

The second unusual incident was an unprecedented attack on US foreign policy in the Middle East—particularly the Camp David accords—and on President Carter personally by the editor-in-chief of a leading Saudi Arabic-language newspaper. Clearly labeled as the editor’s personal views, the editorial on 20 January was very harsh by Saudi standards, which usually avoid direct attacks on leaders of friendly countries. It is also noteworthy because the editor, one of the more reflective and liberal-minded Saudi journalists, had editorially urged that the Camp David accords be given a chance last fall when other Saudi papers were attacking them. In the past, the editor has gotten into trouble with Saudi government officials for his public stands, but there appears to have been no official reaction this time. [classification not declassified]

[Page 592]

The mosque and newspaper incidents are significant because they provide a rare glimpse of “public opinion” in Saudi Arabia when it differs sharply from official Saudi positions. Saudi leaders are not immune from such pressures; many, particularly the more conservative, probably agree with sentiments expressed in both cases. If the newspaper editor is not censured for his editorial, it may indicate he has sympathetic protectors among powerful members of the royal family. [classification and handling restriction not declassified]

Outlook: The Conservative Tide and Implications for US Goals [classification and handling restriction not declassified]

The internal incidents support our impression that the conservative tide is running strong in Saudi Arabia and will be strengthened by developments in Iran, with serious implications for US interests. For political and economic reasons, we believe Saudi Arabia increasingly sees its self-interests—or at least the way to pursue common interests—as diverging from the US, especially on the issues of high rates of oil production, high levels of spending on development to recycle petrodollars, and US-sponsored Middle East peace efforts. Saudi assertions of its self-interest have already begun, but will be accelerated if the Saudis believe the US is not responsive to their overriding concern—regional security. [classification and handling restriction not declassified]

Politically, senior conservative princes have been among the most critical of US peace efforts and of President Sadat’s unilateral negotiations with Israel; at least one such prince advocated an immediate cutoff of all Saudi economic aid to Egypt when Sadat signed the Camp David accords. Ironical as it may appear to the US, two senior conservative princes have advocated establishing some level of relations with the USSR. [classification and handling restriction not declassified]

For different reasons, the young, Westernized technocrats who play an increasingly influential role on Saudi planning, financial, monetary, and oil policy are also very critical of US policy when it clashes with their view of Saudi interests. These technocrats—most of whom were educated in the US or UK—view Saudi interests pragmatically and often have the advanced financial or technical training necessary to back their arguments with senior princes. While these technocrats might favor a more liberal internal social policy than their elders, they often are very conservative on issues such as oil production and the pace of development.

Despite the current statements by Saudi leaders of willingness to fill the shortfall in oil production caused by the turmoil in Iran, we believe current policy remains that Saudi Arabia should produce no more than 8.5 million barrels/day on an annual basis, that it should [Page 593] resist US pressure to spend billions of dollars to increase future productive capacity, and that the development plans should be slowed considerably.

  1. Source: National Archives, RG 59, Bureau of Intelligence and Research, Office of Research and Analysis for the Soviet Union and Eastern Europe, Program Files for Soviet Middle East materials 1960–1982, Lot 90D113, Box 6, Finished Intelligence. Secret; [handling restriction not declassified]. Prepared in the Middle East Division of the Office of Political and Regional Analysis of the National Foreign Assessment Center.
  2. See Document 179.
  3. See Document 177.