THE SEIZURE and killing of foreign employees in Saudi Arabia last weekend has underlined the depth of the crisis the US faces across the Middle East. Shockwaves spread through the world's oil markets in the wake of the attack. Saudi Arabia is the world's largest oil exporter and the only country currently with the capacity to boost output to drive down prices.
Saudi authorities say 22 people, all but three of them foreigners, were killed when commandos stormed the Oasis housing compound in the oil-rich city of Khobar. This event is the latest in a series of terrorist attacks aimed at the Saudi regime and Western business interests.
On 1 May there was an attack at Yanbu, a giant petrochemical complex on the Red Sea coast. The attacks reveal the mounting turmoil in Saudi Arabia and the instability of its dictatorial regime.
For the gang in the White House toppling Saddam Hussein was meant to usher in a pro-Western regime in Iraq which would rapidly spread to other countries in the Middle East.
Top of the list was Saudi Arabia. Neo-conservatives recognised that the majority (15 out of 19) of the hijackers on 11 September 2001 were from Saudi Arabia. The most ambitious hawks made no secret of their aim to impose regime change, even though rule by a single family-the House of Saud-had served the US well for half a century.
They believed that controlling Iraq, which has the second largest oil reserves, would make the US less dependent on Saudi oil. Those imperial fantasies have now come crashing against reality. The occupation of Iraq is going disastrously for the US and Britain, putting beyond the foreseeable future any hope of oil multinationals boosting output. Far from moving in a more pro-US direction, Saudi Arabia is lurching deeper into crisis.
The terrorist attacks are a symptom of this. The cause is immense frustration among millions of Saudis at corruption, inequality, dependence on the US, and poverty. Some 60 percent of the Saudi population is under the age of 25. The country has the fastest growing population in the world. The number of Saudis is set to double to 40 million in the next 20 years.
A decade and a half ago the oil wealth was concentrated in the hands of the ruling House of Saud and its hangers-on, but it did trickle into Saudi society at large. The average wage was $22,000. It is now $7,500. The fall in living standards is even greater. The Saudi welfare system used to grant free cradle to grave healthcare and education.
Now unemployment for men under the age of 30 is estimated to be between 20 and 30 percent. Many young Saudis are being forced into the kind of dirty, insecure jobs that were once done almost wholly by foreign workers. There are seven million foreign workers in Saudi Arabia. Very few of them live in luxury compounds like the one seized last week.
They are from Bangladesh, Pakistan, the Philippines, Palestine and other parts of the Middle East. Economic hardship for Saudis is fused with rage at US support for Israel and renewed imperialist intervention in the Middle East. It is shot through with hatred for the Saudi regime. The royal family and the handful of other families who run the country are so corrupt that the Saudi ambassador to the US admits that $50 billion has gone missing from the government's coffers.
It is the well of bitterness at this that feeds support for Osama Bin Laden and the spate of terror attacks in Saudi Arabia.
There is a popular desire for change
IT IS not only tiny terrorist groups that have tried to capitalise on the discontent in Saudi society. Dissidents have tried to organise to bring change. The Movement for Islamic Reform in Arabia claims to have organised unprecedented demonstrations against the war last year.
Under the House of Saud's highly repressive regime it is only in the mosque that people have a political space to organise. The US and Britain both claim to support reform in Saudi Arabia. They have looked to limited reform from within the Saudi regime, in effect headed by Crown Prince Abdullah.
Attempts to liberalise Saudi society have deepened the instability. Abdullah's response has been to try to wrap the regime in radical Islamist rhetoric for fear of losing ground to opposition.
That has strengthened the confidence of hardliners in the regime. But the manoeuvring between rival princes has not brought support for the regime.
Oil crisis threat to the economy
OIL PRICES had already topped $40 a barrel before last weekend's attack. The turmoil in the Middle East had shattered the illusion that industrialised countries were no longer dependent on Saudi oil. That became clear in the run-up to this week's meeting of the Organisation of Petroleum Exporting Countries (OPEC).
Saudi Arabia was trying to persuade other members of the cartel to increase output, thus stopping the recent sharp rise in prices. But the only country with the reserve capacity to pump significantly more oil is Saudi Arabia. There is less spare capacity in the world's oil supplies than 30 years ago, when a sharp rise in prices helped trigger global recession.
By 1985 there was still 15 million barrels per day spare capacity, about a quarter of world demand at the time. Now there are about two million, almost all in Saudi hands. That is less than 3 percent of world demand.
Dependence on Saudi Arabia and the wider Middle East is set to grow. One quarter of the world's oil reserves are under Saudi Arabia. Four nearby countries-Iran, Iraq, the United Arab Emirates and Kuwait-each have about a tenth. The more the US tries to dominate the region, the more it stirs up opposition. That threatens its own power, and the stable supply of capitalism's most vital commodity.
Saudi regime faces grave future
A REPORT on the website of the Movement for Islamic Reform in Arabia, one of the major Saudi opposition groups, paints a bleak picture of the problems faced by the Saudi government. It says, 'Most of the regime's security and military apparatus is devoted to dealing with the Jihadist current, which means it is failing to preserve law and order, protect citizens' intellectual, economic and social security, or maintain national security.'
Under this pressure, the facade of royal unity is beginning to fracture. 'The ruling family can no longer hide its disagreements and internecine rivalries. These cracks began to appear on the surface after the explosion in Riyadh.
'While ordinary people were suffering, the royal family was trading accusations as each faction tried to appear in control of security and more powerful than the others. The regime is experiencing a crisis of confidence in its religious legitimacy and its conviction that it stands as a symbol for the nation.'
Saudi Arabia is facing graver threats than the attacks, according to the report. One of these is the death of King Fahd, which will 'unleash a violent struggle inside the ruling family'.
Another crisis would erupt if there were further attacks by radical Islamists on targets in the US. 'What would then be the fate of the House of Saud?' the report asks.