Weekly Geopolitical Report – The Saudi Tribulation (November 4, 2013)

by Bill O’Grady

On October 18th, Saudi King Abdullah’s government announced that his kingdom would reject an invitation by the U.N. Security Council to occupy a seat on the council.  This rejection is the first in the history of the United Nations and occurred after Saudi diplomats had worked diligently to garner the invitation.  The rejection came as a surprise to the U.N. and to the U.S.

According to reports, King Abdullah decided to reject the seat due to the Security Council’s “double standards.”  He argued that the inability to resolve the Palestinian issue, prevent the proliferation of WMD and stop the Syrian regime from killing its citizens as reasons for the refusal to accept the post.  However, these factors are generally thought to be excuses.  Instead, the Saudi regime, incensed at U.S. policy decisions, rejected the seat as a way to express the kingdom’s displeasure with the American government.  We note that Turkey and Egypt, also unhappy with recent decisions by the Obama administration, supported the kingdom’s decision.

In this report, we will discuss the basic history of U.S. and Saudi relations, focusing on the historical commonality of goals between the two nations.  We will detail how the aims of the two nations have diverged since the Cold War ended and use this to examine America’s evolving plans for the Middle East.  We will discuss how the evolution of U.S. policy is affecting Saudi Arabia and the pressures these changes are bringing to the kingdom.  As always, we will conclude with market ramifications.

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