Saudi Arabia: Background and U.S. Relations
Christopher M. Blanchard
Specialist in Middle Eastern Affairs
February 12, 2014
Congressional Research Service
7-5700
www.crs.gov
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Saudi Arabia: Background and U.S. Relations
Summary
The kingdom of Saudi Arabia, ruled by the Al Saud family since its founding in 1932, wields
significant global political and economic influence as the birthplace of the Islamic faith and by
virtue of its large oil reserves. Close U.S.-Saudi official relations have survived a series of
challenges since the 1940s, and, in recent years, shared concerns over Al Qaeda-inspired
terrorism and Iranian regional ambitions have provided a renewed logic for continued strategic
cooperation. The ongoing political upheaval in the Middle East and North Africa is changing the
dynamics of long-running reform debates in the kingdom. The full effect of these events on the
kingdom and on U.S.-Saudi relations has yet to be determined. Official U.S. concerns about
human rights and religious freedom in the kingdom persist, and some Members of Congress have
expressed skepticism about Saudi leaders’ commitment to combating religious extremism and
sharing U.S. policy priorities in the Middle East and South Asia. However, Bush and Obama
Administration officials have referred to the Saudi government as an important regional partner in
recent years, and U.S. arms sales and related training programs have continued with
congressional oversight. Since October 2010, Congress has been notified of proposed sales to
Saudi Arabia of fighter aircraft, helicopters, missile defense systems, missiles, bombs, armored
vehicles and related equipment and services, with a potential value of more than $86 billion.
At home, Saudi leaders are weighing a litany of economic and political reform demands from
competing, energized groups of citizen activists. The prevailing atmosphere of regional unrest
and increased international scrutiny of domestic political developments further complicates
matters. Groups representing liberal, moderate, and conservative trends have submitted advisory
petitions to King Abdullah bin Abdelaziz, and many recent reform statements refer to and echo
past requests submitted to the king and his predecessor, the late King Fahd. Initiatives to organize
nationwide protests have been met with some popular criticism and official rejection, while local
protests over discrete issues occur sporadically. Some observers fear that public confrontations
with unpredictable consequences may result from the apparent incompatibility of a ban on all
demonstrations and the enthusiasm of different activist groups, including Shiite citizens of the
Eastern Province, government employees, students, and relatives of prisoners and terrorism
suspects. The Obama Administration has endorsed Saudi citizens’ rights to free assembly and free
expression. Saudi leaders reject foreign intervention in the country’s internal affairs.
Since taking power in 2005, King Abdullah has created some public space for domestic social
reform debates and has promoted the concept of a strong national identity among Saudis in the
face of a determined domestic terrorism campaign. Succession arrangements have attracted
particular attention in recent years, as senior leaders in the royal family, including the king, have
faced health crises, and the deaths of two crown princes have raised questions about the transition
to the next generation of the Al Saud family. Robust oil export revenues have strengthened the
kingdom’s economic position over the last decade and provide Saudi leaders with significant
financial resources to meet domestic investment needs and provide new social benefits. Current
U.S. policy seeks to coordinate with Saudi leaders on regional issues and help them respond to
domestic economic and security challenges. It remains to be seen whether U.S. initiatives and,
more importantly, Saudi leaders’ efforts will ensure stability. Shared challenges have long defined
U.S.-Saudi relations, and questions about political, economic, and social reform may become
more pertinent in light of the calls for change that are now swirling around the kingdom.
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Contents
Overview .......................................................................................................................................... 1
Social Change, Unrest, and Succession ........................................................................................... 1
Arms Sales and Military Training .................................................................................................... 4
U.S. Foreign Assistance to Saudi Arabia ......................................................................................... 4
Security Threats and Cooperation .................................................................................................... 6
Consensus and Contention in Regional Affairs ............................................................................... 7
Saudi Arabia’s Economy and U.S. Trade ......................................................................................... 8
U.S.-Saudi Trade and Oil Imports ....................................................................................... 8
Outlook .......................................................................................................................................... 10
Figures
Figure 1. Saudi Arabia: Map and Country Data .............................................................................. 2
Tables
Table 1. Proposed U.S. Defense Sales to Saudi Arabia ................................................................... 5
Appendixes
Appendix. Historical Background ................................................................................................. 11
Contacts
Author Contact Information........................................................................................................... 11
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Saudi Arabia: Background and U.S. Relations
Overview
In spite of apparent differences of opinion over regional developments, U.S.-Saudi security
cooperation continues to anchor official bilateral relations as it has for decades, bolstered by
major new arms sales, continued security training arrangements, enhanced counterterrorism
cooperation, and shared concerns about Iran and Al Qaeda. Since late 2012, the Administration
has notified Congress of over $20 billion in proposed arms sales to the kingdom including
proposed sales that would continue long-established training programs and deliver advanced
stand-off air weaponry to equip Saudi purchased U.S.-fighter aircraft. Ongoing joint efforts to
build stronger economic, educational, and interpersonal ties are intended to broaden the basis of
the bilateral relationship and help meet the economic demands and aspirations of the kingdom’s
young population for employment and more social freedom. The Obama Administration, like its
predecessors, has engaged the Saudi government as a strategic partner to promote regional
security and global economic stability. Current U.S. policy initiatives seek to help Saudi leaders,
under the leadership of King Abdullah bin Abdelaziz, address economic and security challenges.
It remains to be seen whether these U.S. initiatives and, more importantly, Saudi leaders’ own
choices will enable the kingdom to meet the energy consumption, education, employment, and
security needs that its citizens face. The kingdom’s considerable financial clout and its deepening
energy ties to important U.S. trading partners in Asia are important factors for U.S. and Saudi
decision makers to consider when assessing the future of the bilateral relationship. Significant
shifts in the political and economic landscape of the Middle East also have focused greater
international attention on Saudi domestic policy issues and reinvigorated social and political
debates among Saudis. These shifts may make sensitive issues such as political reform,
unemployment, education, human rights, corruption, religious freedom and extremism more
important to U.S.-Saudi relations than in the past. However, the history of these bilateral ties
suggests that any official U.S. criticisms of the kingdom’ s restrictive political and social
environment or any perceived failings by the Saudi government to live up to its reform or
counterterrorism commitments are likely to remain subjects of private diplomatic engagement
rather than public discussion. Leaders in both countries have long prioritized continuity over
policy differences in the face of controversy and some Saudis’ and Americans’ calls for change.
Social Change, Unrest, and Succession
U.S. government statements warn of ongoing terrorist threats in Saudi Arabia, but do not indicate
that U.S. officials expect large-scale public unrest to emerge in the near term.1 U.S. officials have
credited King Abdullah’s government with taking a more responsive and transparent approach to
citizens’ concerns than those of his predecessors. Nevertheless, decision making in the kingdom
reflects consensus among a closed elite dominated by aging members of the Al Saud family. The
government seeks to manage increasingly vocal and public demands for improved economic
opportunities, political rights, and improved social conditions while security forces monitor and
tightly limit political activity and social activism. The government launched large scale social
spending programs targeting housing and unemployment in response to popular demands since
2011, and has expelled hundreds of thousands of foreign workers to boost employment of Saudis.
1 U.S. Department of State Bureau of Consular Affairs, Travel Warning - Saudi Arabia, July 25, 2013.
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Saudi Arabia: Background and U.S. Relations
Figure 1. Saudi Arabia: Map and Country Data
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Saudi Arabia: Background and U.S. Relations
King Abdullah recognized women’s right to vote and stand as candidates in 2015 municipal
council elections and expanded the size of the national Shura Council to include 30 women in the
2013 session. These moves, while controversial in the kingdom, have been seen by some
outsiders as signs that managed, limited political and social reforms are possible. Certain gender-
rights issues have not been resolved: Saudi officials arrested some individuals associated with
recent protests by advocates for Saudi women’s right to drive.
Periodic clashes involving the Shia minority in the oil-rich Eastern Province (see Ash Sharqiyah
in Figure 1 below) and low-level protests by students and families of security and political
detainees create continuing strains on public order and overall stability. Saudi authorities continue
to pursue a list of young Shia individuals wanted in connection with protests and clashes with
security forces in the Eastern Province. In March 2013, Saudi authorities convicted two
prominent human rights activists and advocates for detainee rights, Mohammed al Qahtani and
Abdullah al Hamid, on of a range of charges, including “breaking allegiance” to the king.2
Recently-retired U.S. Ambassador James Smith attributes what he views as an atmosphere of
tension and anxiety among some Saudis and their leaders to the range of economic, social,
political, and foreign policy challenges that the kingdom faces. In October 2013, he said that:
…on one hand you have those [Saudis] with a deep and abiding confidence in the kingdom
— its religion, its culture, and they’re excited about the future. On the other hand you have
those who are deeply worried that somehow the culture is weak, that it is vulnerable, that
social change might erode the very fabric of their society. The chorus of caution feels the
need to control events, to keep out new ideas and outside views as if the proud heritage will
be threatened. …As the Saudi leadership scans the neighborhood they see an uncertain
future, political instability, economic chaos, refugee flows, and meddling from Iran and other
regional players. Domestically they see a demand for jobs, the need for energy alternatives,
and requests for more freedom and opportunity. They have a full plate.3
Saudi leaders are likely to continue to face complex questions about political consent, economic
performance, and social reform while managing leadership transitions expected to transfer power
from the sons of the kingdom’s founder, King Abdelaziz, to his grandsons. King Abdullah and the
Al Saud appear to have managed recent leadership transition decisions smoothly, and an
Allegiance Council made up of senior family members has been established to make transition
decisions after King Abdullah’s reign ends. The Council is untested, but there are no clear
indications that the royal family is poised to revert to the type of competition that characterized
intra-family relations in the mid-20th century, dividing supporters of King Saudi and King Faisal.
Crown Prince Salman bin Abdel Aziz now also serves as Defense Minister, after serving as the
governor of Riyadh for decades. Many observers consider Second Deputy Prime Minister Prince
Muqrin bin Abdelaziz, who last served as director of Saudi intelligence, to likely serve as the next
Crown Prince in the event of a vacancy and to be perhaps the last of the sons of King Abdelaziz
to have the potential to become king. King Abdullah’s son Prince Miteb bin Abdullah and Prince
Mohammed bin Nayef (son of the late Crown Prince and long serving Minister of Interior Nayef
2 According to Amnesty International, the defendants were convicted on charges including “breaking allegiance to and
disobeying the ruler, questioning the integrity of officials, seeking to disrupt security and inciting disorder by calling
for demonstrations, disseminating false information to foreign groups and forming an unlicensed organization.”
Amnesty International, “Saudi Arabia punishes two activists for voicing opinion,” March 11, 2013.
3 Ambassador James Smith (ret.), Remarks at National Council on U.S. Arab Relations Conference, October 2013.
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bin Abdelaziz) lead the security forces of the Ministries of the National Guard and Interior. Other
grandsons of King Abdelaziz, such as Prince Bandar bin Sultan and Prince Salman bin Sultan,
also shape the kingdom’s national security and defense policies in their leadership roles in the
intelligence service and the Ministry of Defense. One critic of the Saudi monarchy has warned
that the division of security ministries among leading princes is an indicator that the future could
reflect “a kingdom with multiple heads” and “a decentralized monarchy consisting of multiple
fiefdoms.”4 The ability of the monarchy’s next generation to successfully manage their
relationships with each other and with competing domestic interest groups is among the factors
likely to determine the country’s future stability, with direct implications for regional stability and
U.S. national security and economic interests.
Arms Sales and Military Training
A series of high-value U.S. proposed arms sales to Saudi Arabia have been announced in the
wake of the 2010 announcement that the Royal Saudi Air Force (RSAF) would reconstitute and
expand its main fighter forces with advanced U.S. F-15 aircraft. The F-15 sale will perpetuate the
reliance of the RSAF (the elite military service in the country) on material and training support
provided by the United States military and U.S. defense contractors. The RSAF sale and others
will guide the immediate future of the United States Military Training Mission (USMTM) in
Saudi Arabia and the Saudi Arabian National Guard Modernization Program (PM-SANG), which
have been active under special bilateral agreements and funded by Saudi purchases since the
1950s and 1970s, respectively. The sales would considerably improve the capabilities of the Saudi
armed forces, and appear to be seen by decision makers on both sides as symbolic commitments
to cooperation during a period of generational leadership change.
U.S. Foreign Assistance to Saudi Arabia
The Obama Administration requests appropriations of small amounts of International Military
Education and Training assistance funding for Saudi Arabia (approximately $10,000) in its annual
budget requests. This nominal amount makes Saudi Arabia eligible for a substantial discount on
the millions of dollars of training it purchases through the Foreign Military Sales program.5 In
prior years, Congress has enacted prohibitions on IMET and other foreign assistance to Saudi
Arabia in annual appropriations legislation, subject to waiver provisions, and the Bush and
Obama Administrations subsequently issued national security waivers enabling the assistance to
continue. Saudi officials have been privately critical of the congressional prohibitions and appear
to prefer to avoid contentious public debate over U.S. foreign assistance, arms sales, and security
cooperation. The Saudi-funded nature of the U.S. training reflects Saudi Arabia’s ability to pay
for the costly programs. It may also point to a shared view among Saudi leaders and successive
U.S. Administrations that U.S.-funded programs would be more vulnerable to potential
congressional scrutiny and pressure.
4 Madawi al Rasheed, “Saudi Arabia’s Unpredictable Succession Plan,” Al Monitor (blog), April 23, 2013.
5 The Administration argues that the discount supports continued Saudi participation in U.S. training programs and this
participation supports the maintenance of important military-to-military relationships and improves Saudi capabilities.
The conference report for H.R. 3288 (H.Rept. 111-366) required the Administration to report to Congress within 180
days (by June 14, 2010) on the net savings this eligibility provides to Saudi Arabia and other IMET recipients.
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Table 1. Proposed U.S. Defense Sales to Saudi Arabia
October 2010 to December 2013, $ billion
Recipient
Estimated
Formal Notification Date
System
Force
Cost
October 2010
F-15 Sales, Upgrades, Weaponry and Training
RSAF
$29.400
October 2010
APACHE, BLACKHAWK, AH-6i, and MD-530F Helicopters
SANG
$25.600
October 2010
APACHE Longbow Helicopters
RSLF
$3.300
October 2010
APACHE Longbow Helicopters
Royal Guard
$2.200
November 2010
JAVELIN Missiles and Launch Units
--
$0.071
May 2011
Night Vision and Thermal Weapons Sights
RSLF
$0.330
June 2011
CBU-105D/B Sensor Fuzed Weapons
RSAF
$0.355
June 2011
Light Armored Vehicles
--
$0.263
June 2011
Light Armored Vehicles
SANG
$0.350
September 2011
Howitzers, Fire Finder Radar, Ammunition, HMMWVs
--
$0.886
October 2011
Up-Armored HMMWVs
RSLF
$0.033
December 2011
PATRIOT Systems Engineering Services
--
$0.120
August 2012
RSAF Fol ow-on Support
RSAF
$0.850
August 2012
Link-16 Systems and ISR Equipment and Training
RSAF
$0.257
November 2012
C-130J-30 Aircraft and KC-130J Air Refueling Aircraft
RSAF
$6.700
November 2012
RSLF Parts, Equipment, and Support
RSLF
$0.300
November 2012
PATRIOT (PAC-2) Missiles Recertification
RSADF
$0.130
June 2013
SANG Modernization Program Extension
SANG
$4.000
July 2013
Mark V Patrol Boats
RSNF
$1.200
August 2013
RSAF Fol ow-on Support
RSAF
$1.200
October 2013
U.S. Military Training Mission (USMTM) Program Support Services
MOD
$0.090
October 2013
SLAM-ER, JSOW, Harpoon Block II, GBU-39/B Munitions
RSAF
$6.800
November 2013
C4I System Upgrades and Maintenance
RSNF
$1.100
December 2013
TOW 2A and 2B Missiles
RSLF
$0.170
December 2013
TOW 2A and 2B RF Missiles
SANG
$0.900
Total
$86.605
Source: U.S. Defense Security Cooperation Agency (DSCA).
Notes: Includes proposed sales to Royal Saudi Air Force (RSAF), Saudi Arabian National Guard (SANG), Royal
Saudi Land Forces (RSLF), Royal Guard, Royal Saudi Air Defense Force (RSADF), Royal Saudi Naval Forces
(RSNF), and Ministry of Defense (MOD). Dashes indicate unspecified recipient force in DSCA public notice.
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Security Threats and Cooperation
The Saudi Arabian government views Al Qaeda, its affiliates, and supporters as direct threats to
Saudi national security. Recent State Department reports have credited the Saudi government with
working to preserve “a robust counterterrorism relationship with the United States” characterized
by “enhanced bilateral cooperation.”6 Saudi and U.S. officials have stated that Al Qaeda in the
Arabian Peninsula, based in Yemen and led by Saudi nationals, constitutes the leading terrorist
threat to the kingdom. The State Department has assessed that AQAP has “stepped up its efforts
to inspire sympathizers throughout Saudi Arabia in an effort to compensate for difficulties in
carrying out cross-border attacks.”7 The aggressive expansion of the Islamic State of Iraq and the
Levant (ISIL) in neighboring Iraq and in Syria have likely raised Saudi Arabia’s level of concern
about the group, and may lead the Saudis to seek stronger partnerships with other Syrian
opposition forces and Iraqi Sunnis.
U.S.-Saudi counterterrorism and internal security cooperation has expanded since 2008, when a
bilateral technical cooperation agreement was signed establishing a U.S.-interagency critical
infrastructure protection advisory mission to the kingdom. Modeled loosely on embedded
advisory and technology transfer programs of the U.S.-Saudi Joint Commission for Economic
Cooperation, the Office of the Program Manager-Ministry of Interior (OPM-MOI) is a Saudi-
funded, U.S.-staffed senior advisory mission that provides embedded U.S. advisors to key
industrial, energy, maritime and cyber security offices within the Saudi government. In parallel to
these advisory efforts, the United States Military Training Mission also oversees a Saudi-funded
program to train a Facilities Security Force for the Ministry of Interior to protect key
infrastructure locations.
According to U.S. government sources, terrorist financing by individuals in Saudi Arabia remains
a serious threat to the kingdom and the international community, even though Saudi authorities
have made “serious and effective efforts” to combat illicit flows of funds to extremists.8 Saudi
authorities have forbidden Saudi citizens from travelling to Syria to fight and have taken steps to
limit the flow of privately raised funds from Saudis to armed Sunni groups and charitable
organizations in Syria. Nevertheless, references by some Saudi officials and clerics to genocide
against Syrian Sunnis and foreign invasion by Iran and Hezbollah contribute to popular
perceptions of the crisis in Syria as one that demands action by individuals. When asked about the
kingdom’s views on jihad in Syria during a joint appearance with U.S. Secretary of State John
Kerry in July 2013, Saudi Foreign Minister Prince Saudi al Faisal said, “Jihad is what a person
can offer. A person may make an effort with his hand, so he may do that, or with his tongue,
which is the least that one can do. We are making efforts on all levels.”9 In January 2014, the
6 U.S. State Department Office of the Coordinator for Counterterrorism, Country Reports on Terrorism 2012, May 30,
2013.
7 Ibid.
8 “Despite serious and effective efforts to counter the funding of terrorism originating from within its borders, entities
in Saudi Arabia continue to serve as an important source of funds flowing to Sunni-based extremist groups. …Saudi
Arabia’s capacity to monitor compliance with and enforce its banking rules has improved and helped to stem the flow
of illicit funds through Saudi financial institutions. The Saudis’ ability to stop bulk cash smuggling also has improved.
However, cash illicitly collected and transferred via pilgrims on Hajj or Umrah continues to flow.” U.S. State
Department, 2013 International Narcotics Control Strategy Report (INCSR)--Volume II: Money Laundering and
Financial Crimes Country Database, July 1, 2013.
9 U.S. Government Open Source Center (OSC) Document IML2013062548784417, “Saudi TV Carries Prince Al
Faisal, Kerry News Conference on Syrian Crisis, Other Issues,” Al Ikhbariyah Satellite Channel in Arabic, Riyadh,
(continued...)
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kingdom issued a decree setting prison sentences for Saudis found to have travelled abroad to
fight with extremist groups, including tougher sentences for any members of the military found to
have done so.
Consensus and Contention in Regional Affairs
While some Saudi officials have made recent statements highlighting growing differences
between U.S. and Saudi leaders on key issues, Saudi Foreign Minister Prince Saud al Faisal bin
Abdelaziz Al Saud has stated during appearances with U.S. Secretary of State John Kerry that the
two countries have relatively few differences in objectives, and “most of the differences are in
tactics.”10 Such tactical differences have been apparent in comparing U.S. and Saudi policies
toward the conflict in Syria and nuclear negotiations with Iran, where the Saudis have objected to
a perceived shift away from confrontation and toward negotiated settlements. It remains to be
seen whether such tactical differences in fact mask irreconcilable differences in objectives on key
issues.
Saudi leaders see the government of Iran as an existential threat and view Iran’s nuclear program
as inherently threatening, in spite of Iranian assurances of its peaceful purposes. Nevertheless, the
Saudi cabinet responded to the 2013 interim nuclear agreement with Iran by describing it as:
a primary step towards a comprehensive solution to the Iranian nuclear program, as long as
good intentions are provided and as long as it concludes in a Middle East and Gulf region
free of all weapons of mass destruction, including nuclear weapons. The Kingdom hopes that
such a step will be followed by more important steps leading to a guarantee of the right for
all countries in the region to peacefully use nuclear energy.
Although the public Saudi reaction was more positive than many experts expected, it remains to
be seen how Saudi Arabian leaders will respond to any further U.S. negotiations with Iran or any
perceived failings by Iran or the United States to live up to their commitments as outlined in the
agreement. Analysts continue to debate whether the Kingdom would seek to acquire its own
nuclear weapons capability if Iran did so. Saudi officials may fear that closer U.S.-Iranian
relations could undermine the basis for close Saudi-U.S. relations and empower Iran to be more
assertive in the Gulf region and the broader Middle East.
Statements by some Saudi leaders suggest they see Iran’s policies as part of an expansionist,
sectarian agenda aimed at empowering Shia Muslims in the region at the expense of Sunnis.
Iranian leaders attribute similarly sectarian motives to their Saudi counterparts. Saudi leaders are
particularly critical of Iranian support for the government of Bashar al Asad in Syria. Saudi
officials favored U.S. military intervention to a negotiated agreement in response to alleged
chemical weapons use by the Asad regime. Saudi support for the Sunni monarchy in Bahrain and
antipathy toward Iraqi Prime Minister Nuri al Maliki and his Shia allies reflects similar Saudi
suspicion of Shia and Iranian intentions. Saudi leaders also have been critical of U.S. attempts to
pressure Bahraini leaders to accommodate the demands of Bahrain’s largely Shia opposition.
(...continued)
June 25, 2013.
10 Ibid.
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With regard to Egypt, Saudi Arabia was very critical of what it described as a U.S. failure to back
a longtime ally when former president Hosni Mubarak initially came under pressure to resign.
The Saudis later embraced the Egyptian military’s ouster of the elected government led by
Mohammed Morsi, who was affiliated with the Muslim Brotherhood, and has offered billions of
dollars in financial assistance, with some Saudi officials publicly promising to replace any U.S.
assistance withheld in protest of the military’s actions. Some leading Saudi clerics defied the
government’s embrace of the Egyptian military’s move, illustrating the potential for rifts among
the government, some members of the religious establishment, and their respective supporters.
By all accounts, King Abdullah remains committed to the terms of the peace initiative he put
forward under the auspices of the Arab League in 2002, which calls for normalization of Arab
relations with Israel following the conclusion of a comprehensive Israeli-Palestinian peace accord
and the establishment of a Palestinian state. However, it remains to be seen whether Saudi
officials will support any specific outcomes of current negotiations backed by the Administration.
Saudi Arabia supports the international recognition of a Palestinian state and full Palestinian
membership at the United Nations. Following a November 20, 2013, meeting with Palestinian
Authority President Mahmoud Abbas, Crown Prince Salman bin Abdelaziz released a statement
renewing:
the kingdom’s firm stance in support of the Palestinian cause until the Palestinian people
regain all their occupied territories, including Al-Quds [Jerusalem]. The Crown Prince
expressed the kingdom’s condemnation of all Israeli plans to build settlements, stressing that
these schemes constitute an obstacle to peace, a flagrant violation of the resolutions of
international legitimacy, and a blatant attack on the firm legitimate rights of the Palestinian
people.11
Saudi authorities declined a seat on the United Nations Security Council in October 2013, citing
their views of its “double standards” and general “inability to carry out its duties and assume its
responsibilities.” Saudi officials have called for “profound and comprehensive reform” of the
Council, including “abandoning the veto system or restricting its use” and “expanded
membership of the Council that includes permanent seats for Arab States, African States and other
under-represented groups.”12
Saudi Arabia’s Economy and U.S. Trade
U.S.-Saudi Trade and Oil Imports
Saudi Arabia remained the largest U.S. trading partner in the Middle East in 2013.13 According to
the U.S. International Trade Administration, Saudi exports to the United States in 2013 were
worth more than $51.8 billion (up more than $29.7 billion from 2009 but below the 2008 figure
of $54.8 billion). U.S. exports to Saudi Arabia were valued at more than $18.9 billion (up nearly
$8.2 billion since 2009). To a considerable extent, the high value of U.S.-Saudi trade is dictated
11 Saudi Press Agency, “Crown Prince Receives Palestinian President,” November 20, 2013.
12 Statement of Permanent Representative of the Kingdom of Saudi Arabia to the United Nations, November 8, 2013.
13 Comparable 2013 figures for Israel, the second-largest U.S. trading partner in the Middle East, were more than $22.6
billion in exports to the United States and more than $13.7 billion in U.S. exports to Israel. U.S. exports to the United
Arab Emirates in 2013 are estimated at more than $24.6 billion.
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by U.S. imports of hydrocarbons from Saudi Arabia and U.S. exports of weapons, machinery, and
vehicles to Saudi Arabia. Fluctuations in the volume and value of U.S.-Saudi oil trade account for
declines in the value of Saudi exports to the United States in some recent years.
Efforts in the United States to produce more oil domestically are both lowering U.S. imports of
oil overall and contributing to conditions in international oil markets that have put some
downward pressure on oil prices. Since Saudi Arabia remains dependent on oil export revenues
for much of its national budget, these trends have been viewed with some mild public and official
concern in the kingdom. Rising demand in South and East Asia is expected to compensate for
declining oil imports in North America in coming years. According to the U.S. Energy
Information Administration, as of the end of January 2014, Saudi Arabia was the second-largest
source of U.S crude oil imports, providing more than1.3 million barrels per day (mpd) of the 6.89
mpd in gross U.S. crude imports, behind only Canada.14 Oil exports to the United States account
for roughly 15% of Saudi exports, with East Asia accounting for more than 50%.15
In 2013, Saudi Arabia produced an average of more than 9 mbd of its estimated 12.5 mbd
capacity and had indicated that it may not expand that capacity in light of current trends in
international oil markets. Saudi officials have used their spare production capacity to moderate
volatility in oil markets in recent years, viewing price stability as a sound investment in
maintaining global economic activity, keeping revenues steady, and dissuading further investment
by consumers in unconventional oil resources or alternative energy technologies because of high
prices. This strategy has contributed to relative calm in markets that otherwise could have been
more severely agitated by persistent unrest in the Middle East, loss of supplies from Libya and
other producers, and speculation about the impact of sanctions or potential conflict with Iran.
Unrest in Iraq and Libya and energy sanctions on Iran preclude investment in oil production in
those countries that might otherwise expand available supplies and lower prices, with negative
fiscal implications for the kingdom.
By some estimates, the volume of oil consumed in Saudi Arabia may exceed oil exports by 2030
if domestic energy consumption patterns do not change.16 Some analysts have suggested that
Saudi leaders could avoid the risks posed by this scenario by adopting “tough policy reforms in
areas such as domestic pricing of energy and taxation, an aggressive commitment to alternative
energy sources, especially solar and nuclear power, and increasing the Kingdom’s share of global
oil production.”17 However, subsidy changes and taxation are viewed as politically sensitive given
the lack of popular representation in the kingdom’s government.
In the last few years, oil export proceeds have provided sufficient funds for Saudi Arabia to
maintain healthy, but declining budget surpluses and make large spending increases to invest in
solutions for long-standing social and economic problems, including those related to education,
employment, and housing. The kingdom’s foreign reserves are estimated at more than $700
billion, and its current debt to GDP ratio is under 3% (down from more than 100% in the late
14 Based on EIA data – “Weekly Imports & Exports:Crude” and “Weekly Preliminary Crude Imports by Country of
Origin – Four Week Average,” January 31, 2014.
15 EIA Country Analysis Brief – Saudi Arabia, February 2013.
16 Glada Lahn and Paul Stevens, Burning Oil to Keep Cool: The Hidden Energy Crisis in Saudi Arabia, Chatham
House (UK), December 2011; and, John Sfakianakis, “Saudi Arabia's Essential Oil,” Foreign Affairs, January 8, 2014.
17 Brad Bourland and Paul Gemble, “Saudi Arabia’s coming oil and fiscal challenge,” Jadwa Investments (Riyadh),
July 2011.
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1990s). Since 2011, the kingdom has approved a series of record annual budgets and launched
major additional spending programs to meet economic and social demands that some feared could
fuel stronger calls from citizens for political change. Actual spending reached an all-time high in
2013, and the 2014 budget sets a higher spending target than 2013, with 38% of total spending
earmarked for education and healthcare initiatives. Defense and security spending exceeded 30%
of the budget in 2013. In December 2013, an IMF official observed that significant Saudi labor
force growth in the coming decade will require “a large increase in the absorption of nationals
into private sector jobs …to avoid an increase in unemployment.” The kingdom’s investments in
the education sector are an acknowledgement of the challenges related to preparing the large
Saudi youth population to compete and prosper in coming decades. It also is possible that a more
educated and economically engaged youth population could make new social or political reform
demands as well.
Outlook
As described above, Saudi Arabia has close defense and security ties with the United States
anchored by long-standing military training programs and supplemented by ongoing high-value
weapons sales and new critical infrastructure security cooperation initiatives. These ties would be
difficult and costly for either side to fully break or replace. Saudi officials have expressed
frustration with recent U.S. policy decisions, but at present leaders on both sides of the bilateral
relationship appear fundamentally committed to maintaining cooperation. President Obama is
scheduled to visit Saudi Arabia in March 2014 to exchange views with King Abdullah and
presumably to strengthen bilateral ties.
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Saudi Arabia: Background and U.S. Relations
Appendix. Historical Background
The modern kingdom of Saudi Arabia is the third state established in the Arabian Peninsula since
the end of the 18th century based on the hereditary rule of members of the Al Saud family. In the
mid-18th century, a local alliance developed between the Al Saud and the members of a
puritanical Sunni Islamic religious movement led by a cleric named Mohammed ibn Abd Al
Wahhab. The Saudi-Wahhabi alliance built two states in the Arabian Peninsula during the next
century that eventually collapsed under pressure from outside powers and inter- and intra-family
rivalries.
During the first quarter of the 20th century, an Al Saud chieftain named Abd al Aziz ibn Abd al
Rahman Al Saud (commonly referred to as Ibn Saud) used force to unify much of the Arabian
Peninsula under a restored Al Saud state. Ibn Saud’s forces overcame numerous tribal rivals with
the support of an armed Wahhabi contingent known as the Ikhwan (or brotherhood), and, at times,
with the financial and military backing of the British government. By 1932, King Abd al Aziz and
his armies had crushed an Ikhwan revolt, consolidated control over most of the Arabian
Peninsula, and declared the establishment of the Kingdom of Saudi Arabia.
Five of Ibn Saud’s sons—Kings Saud, Faisal, Khaled, Fahd, and Abdullah—have succeeded him
as rulers of the Saudi kingdom during the subsequent eight decades. This era has been dominated
by the development and export of the kingdom’s massive oil resources and the resulting
socioeconomic transformation of the country. A series of agreements, statements by successive
U.S. administrations, arms sales, military training arrangements, and military deployments have
demonstrated a strong U.S. security commitment to the Saudi monarchy since the 1940s. That
security commitment was built on shared economic interests and antipathy to Communism and
was tested by regional conflict during the Cold War. It has survived the terrorism-induced strains
of the post-Cold War era relatively intact, and is poised to continue as recently concluded arms
sales to Saudi Arabia—the largest in U.S. history—are implemented.
Author Contact Information
Christopher M. Blanchard
Specialist in Middle Eastern Affairs
cblanchard@crs.loc.gov, 7-0428
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