12/17/2006 08:07 pm ET Updated May 25, 2011

Saudi Realpolitik: Political Blackmail, Oil Price Extortion

Some two weeks ago, according to the New York Times, Saudi King Abdullah issued a warning to Vice President Cheney during his one day summoned visit to Saudi Arabia. His nation would provide financial support and aid to Iraqi Sunnis if the United States pulled its troops out of Iraq.

This report has been denied both by the Saudis and White House spokesman Tony Snow " that's not Saudi government policy".

But yet, what if it's true. We are dealing with interlocutors where duplicity is not an unknown feature of discourse. Only last month Nawaf Obaid a senior advisor to the Saudi Arabia's Ambassador to the US, Prince Turki al- Faisal wrote in the Washington Post quoting from a speech of al-Faisal's the month before:

"...since America came into Iraq uninvited it should not leave uninvited" (a personal aside- no mention of the fifteen Saudis that were on those three planes that set off these disastrous chain of events).

And then he went on: "If it does, one of the first consequences will be massive Saudi intervention to stop Iranian backed Shiites from butchering Sunnis. ... As the economic powerhouse of the Middle East, the birthplace of Islam and the de facto leader of the world's Sunni community...Saudi Arabia has both the means and responsibility to intervene."

Shortly thereafter Nawaf Obaid was summarily dismissed. Barely two weeks later Prince Turki al-Faisal resigned as ambassador to the US. Was candor their sin of commission?

If so it would be an exercise of blatant political blackmail threatening the American government with the following Hobson's choice:
A- Either you continue your presence in Iraq at the cost of the lives your soldiers, and at the cost of billions and billions in treasure, or
B- We the Saudis, will initiate policies that will all but guarantee a massive riposte by Iran and the descent of the region into a conflagration of war and savagery. It will certainly result in impaired access to, or possibly even destruction of the regions oil and gas infrastructure and push the world's economies into deep crisis.

This inferred threat and this scenario underlines the grave dilemma in which we find ourselves. Whether to stay in Iraq, and for how long, has become a matter of urgent debate for the American public. But clearly for the Saudis, it is in their vital interests that we stay.

Yet in their immutable fashion of "heads I win, tails you lose" the Saudis have taken it upon themselves at this key moment to take the lead within OPEC initiating the first series of OPEC production cuts in 2 ½ years in order to further ratchet up the price of oil. This at the very beginning of the winter heating season and with the price of oil already some 300% higher then at the start of the Iraq invasion. Thereby, according to the International Energy Agency providing "cold comfort" for a risk prone global economy. Before their decision our Energy Secretary Sam Bodman together with the head of the International Energy Agency Claude Mandril called on OPEC (read Saudi Arabia, its leading player) to wait until next year before deciding on further production cuts. Their call fell on deaf ears. Thus, to use an old saw, while we are engaged in Iraq, looking after interests that include those that are of fundamental importance to the Saudis, they are happily stabbing us and the rest of the world's economies in the back.

As a pointed aside, only this past week Saudi Arabia successfully bought the British government. Britain's Serious Fraud Office decided to drop a corruption probe into a transaction (BAE System's Al Yamamah arms deal) with Saudi Arabia. The Saudis had threatened to pull out of L6Bn negotiation, substitue French jets for British fighter jets unless the probe was brought to an end. With Tony Blair's blessing, Attorney General Lord Goldsmith announced he was dropping the probe. He added that the decision had been made in the wider public interest, which had to be balanced against the rule of law.

Are we far behind. It would be highly interesting to shine a bright light on the interface between our elected officials, our government agencies and the moneyed influence of the Saudis, beyond the Bush White House and the Baker law firm. Saudi Arabia's current relationship with the US could perhaps be best described, "ask not what we can do for you, but rather what you can do for us". And it is time that changed.