Sam Fletcher
Senior Writer
With world attention focused this month on Japan's earthquake disaster and nuclear crisis and the revolt to overthrow Moammar Gadhafi in Libya, few noticed what some are describing as a "proxy war" between Saudi Arabia and Iran in the small kingdom of Bahrain.
Although not a major oil producer, Bahrain is important for its population mix, with 70% of its people of the Shia Muslim sect, "many with Iranian ties," said analysts at the Centre for Global Energy Studies (CGES), London. That is "the same ethnic and sectarian makeup as Saudi Arabia's Hasa region where most of the Kingdom's oil happens to be."
Iran and Saudi Arabia are old antagonists, and Iran is reported to be stirring up resentment against Sunni Muslims, which includes the Bahraini and Saudi royal families. After several days of violent demonstrations by Shias against the Bahraini monarchy, more than 1,000 Saudi troops and 500 police from the UAE made a surprise move into that island nation at the request of the beleaguered Al Khalifa ruling family.
"The deployment marked the first cross-border military operation to quell unrest since the Middle East and North Africa (MENA) region rebellions began in January," said analysts at Barclays Capital. King Hamed ibn Isa Khalifa declared a 3-month state of emergency and gave security services sweeping powers to restore order.
The involvement of troops from the Gulf Cooperative Council (GCC) poses awkward problems for the US with its Fifth Fleet based in Bahrain. Moreover the incursion came just days after US Defense Sec. Robert Gates visited Bahrain. Gates denied advance knowledge of the incursion and said he encouraged the government to make more reforms. Still, many Arabs believe the US gave tacit approval to the deployment.
The White House urged Saudi Arabia and other GCC troops to exercise restraint, respect the Bahraini citizens' rights, and "act in a way that supports dialogue instead of undermining it."
Following arrival of Saudi troops, demonstrators expanded the barricades and checkpoints around a tent city at the Pearl traffic circle that they occupied since February in protest of "systematic discrimination" against majority Shiite Muslims by the Sunni rulers. Meanwhile, the Iranian government condemned the presence of Saudi troops in Bahrain.
"If the intent of Bahrain's ruling Khalifa family was to shore up its precarious position, it seemed at least as probable that bringing in Saudi troops would worsen the crisis by raising the chance of violence and uniting the often-fractious opposition behind a single issue: a refusal to yield to outside military pressure," said CGES analysts. There since have been clashes between government forces and demonstrators resulting in injuries and deaths. Opposition leaders were arrested.
US-Saudi relations
"The [friendly] relationship between the US and Saudi Arabia has been the key axis for the oil market over many decades," said Paul Horsnell, managing director and head of commodities research at Barclays Capital in London. "When an action by GCC governments elicits for different reasons an unveiled negative diplomatic response from the US and Iranian governments, that is so unusual an event it seems clear to us that something profound has changed in the normal dynamic. Indeed, events in Bahrain and the involvement of external forces there, in our view, potentially represent the evidence of a shift in the main parameters of key political and economic relationships in the region."
Saudi King Abdullah was already furious at the haste of the US in abandoning Egypt's President Hosni Mubarak to his fate. The king returned from medical leave this month and has handed out billions of dollars in grants to stave off protestors.
Barclays Capital analysts said, "Despite eroding spare capacity, Saudi Arabia remains the world's only swing producer, possessing the bulk of global spare production capacity, and thus the last word on any attempt to drive down prices through production increases. That intent to calm global oil markets may well take a backseat under these circumstances."
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