#16 - RW 274
Washington Times
September 18, 2003
Beware Soviet-Saudi rapprochement
By Ariel Cohen

As the Bush administration prepares for the summit with Russian President Vladimir Putin, it should monitor the new geopolitical tectonic plate shift, after Crown Prince Abullah of Saudi Arabia completed his little-noticed visit to Russia Sept. 1-2.

Moscow and Riyadh, old rivals, now claim to have found a common agenda, which spans oil, terrorism and arms sales. After the Iraq war, Riyadh is looking to balance U.S. influence in the Persian Gulf. It also hopes to diversify its sources of weapons, and signals to Washington that it keeps all geopolitical options open. No longer sure of its close relationship with Washington, the Saudis are reaching out to the former empire it helped the U.S. to defeat in Afghanistan only 15 years ago.

Moscow, on its part, wants to intercept money flowing to the Chechen rebels from the Gulf, sell arms and attract Saudi investment.

Russia is the third-largest weapons exporter after U.S. and Great Britain; its military sales topped $6 billion in 2002. In 1997, Russia sold a sophisticated $4 billion air defense system to the United Arab Emirates, and would like to open the lucrative Saudi market to its formidable arms industry.

Saudis also recognize that Russia, as the largest producer of oil outside the Organization of Petroleum Exporting Countries (OPEC), the second-largest exporter and the largest producer of natural gas, packs a big punch in the global energy markets. Saudi Arabia, like the U.S., wants its own "energy dialogue" with Moscow.

Saudis are concerned that the more efficient Russian private sector-driven oil industry development model may spread to the Middle East. Riyadh traditionally considered itself the market-maker of oil, and wants others to follow.

A five-year oil-and-gas cooperation agreement will allow the two fuel giants to coordinate supply of oil to the global markets. Russia will not even need to join OPEC to do so, although the U.S. State Department sources believe Washington "will not be excited" if Moscow considers joining the cartel.

Moscow, on its part, is driven toward a partnership with Saudi Arabia for a combination of geopolitical and geoeconomic reasons. It is looking to compensate itself for the loss of influence in the Gulf with the demise of Saddam Hussein, the old Soviet client.

Russia's traditional influence and markets in secular Arab countries — such as Iraq, Syria and Libya — have been in decline.

Russian energy companies, flush with cash, are looking for joint ventures in the Middle East, including in Saudi Arabia, while Saudis may invest in the Russian natural resources sector, including energy, and in real estate and aerospace. The desert kingdom is a perfect partner for giant natural gas development schemes, like power generation, liquid natural gas (LNG) export facilities, and gas-powered desalination of sea water.

Most importantly, though, Moscow believes Saudis and other rich Gulf States keep the keys to the 9-year-old war in Chechnya. An audacious Islamist commander in Chechnya, now dead, was Hattab, a Saudi. Another top commander, Shamil Basaev, receives financial support and a flow of jihadi recruits from the Gulf, where "charities" and rich individuals have poured more than $100 million to support Chechen separatism between 1997-1999 alone, according to a State Department official.

Radical Chechen leaders, such as Movladi Udugov and Zelimkhan Yandarbiev, found asylum in the Gulf. However, al Qaeda's May 12 terrorist attacks in Riyadh, in which more than 35 people died, seemed to change the tone. The Putin administration now hopes to stem the financing and decrease hostilities in and around Chechnya.

Russian-Saudi relations knew its ups and downs. The kingdom paid billions of dollars to fight the Soviet Union in Afghanistan in the 1980s. It also crashed oil prices, denying the Soviet Union its principal source of foreign cash. That conflict has provided the Saudis with U.S. acquiescence to spreading the Salafi (Wahhabi) school of radical Islam worldwide.

The Bush administration should be aware that Russian-Saudi rapprochement may affect U.S. energy security and may diminish Russia's enthusiasm in support of the U.S. war on terrorism. If successful, these ties may lessen America's clout in the Middle East and boost Moscow's impact.

The National Security Council should instruct the U.S. Department of State and the intelligence community to monitor possible new developments between Moscow and Riyadh. These include coordination of oil supply to the global markets by the two energy giants and its effects on oil prices.

Saudi support of Russia's application for observer status in Organization of Islamic Conference also is of great interest. Washington should watch the pace of fund transfers from radical Islamist foundations and private donors in the Gulf to the Chechen rebels and see if the Saudis extradite Chechen resistance leaders currently living in the kingdom. Finally, the Bush administration should monitor arms sales from Russia to Saudi Arabia.

As Moscow and Riyadh discover their newfound common agenda, and pursue cooperation, the Bush administration should remember the old adage: Countries do not have permanent friends. They only have permanent interests.

Ariel Cohen is a research fellow at the Heritage Foundation.

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