Saudi Arabia #2: Oil and the Uncertain Future
When the West found oil in Persia/Iran, the Saudis started looking too and found it in 1938, writes Tomas Pueyo. They have the world’s largest onshore and offshore oil fields. Its oil is cheaper because it is nearer the surface, easy to access, and it spurts up easily. Oil today accounts for 80% of government income. That is scary and we will get to why that is the case. The Saudis spend a bigger share of their income on the military than the US, Russia and Iran! Why spend so much? Partly the Shia and Iran threat, obviously. “Part of it is because the government has no legitimacy beyond that of the sword and religious radicalism, so it must make sure people are not scheming against it. This requires a big security apparatus.” And also, it creates many jobs in and related to the military, but again controllable by the government. And lastly, its location has too many choke points: the Suez Canal, the narrow strait from the Red Sea to the Indian Ocean, and the Straits of Hormuz. S...