The Saudi-US Research Information Service (SUSRIS), publishes a scene-setting briefing by Anthony Cordesman and Jon Alter of the Center for Strategic and International Studies (CSIS) on Pres. Bush’s visit to the Middle East. His trip to Saudi Arabia (which takes place today) is only part of what’s discussed, with the bulk of the briefing discussing why the US is unlikely to go to war with Iran.

Both Cordesman and Alterman point out an important fact in their discussion of what the next president will face in the region: we don’t exactly know. It will be a full year from now before the next Administration is fully in place. By that time, there will be new governments in both Israel and for the Palestinian Authority. Other changes are likely as well.

There are lengthy discussions of Israel/Palestine, Iran, Gulf Security, and other issues. The briefing is worth reading in full.

As for Saudi Arabia, this is what they offer:

Briefing by Anthony Cordesman and Jon Alterman of CSIS

… MR. SCHWARTZ: Anthony Cordesman touched on the energy issue. I just wanted to maybe get back to that for a bit. The president is also going to Saudi Arabia. Can we assume that it has less to do with a Palestinian-Israeli conflict and more to do with oil prices in the U.S.? And I suppose the president is going to ask for the OPEC to open the spigots a little bit. What do you anticipate the Saudi response is going to be?

MR. CORDESMAN: It would be very unusual if the Saudis didn’t do something simply because it’s god manners. But the fact is that is this going to change the agreements being reached in OPEC. Is it going to be a major increase in oil output from Saudi Arabia that somehow will affect world markets? It’s very, very difficult to see how, for several reasons. First, it’s not clear what the incentive is to Saudi Arabia. We can’t deliver on peace. We can’t deliver on arms transfers. We can’t deliver on the Iraq that Saudi Arabia wants. We are raising problems in terms of Iran.

And the reality is the market isn’t being driven by us; it’s being driven by China, by India, by rising Asian demand, which guarantees a market into the long-term. It’s also a fact that in a number of countries outside the Gulf region – Nigeria, Venezuela, and elsewhere, the Saudis can look around and realize that the pressure on demand and supply is not going to be eased. I think what is striking is that Saudi Arabia was for a long time willing to talk about 14 and 16 million barrels a day. It didn’t necessarily mean it, but it kind of went along with the United States politically. In the last couple of weeks, it’s backed away from that position. It’s for the first time said, essentially, that they may effectively have to slow down the increase in oil production.

Now, the fact is we’re at a peak almost in speculative prices on oil. So if the president goes out there and Saudi Arabia does almost anything, you could get a dip in oil prices. But the fact is it isn’t going to matter very much. And it’s a problem that I think people have not paid close attention to. Kuwait is still suffering from internal political problems, which effectively mean there is no way it can efficiently increase oil production.

The UAE is getting a lot of money, and it isn’t using the money efficiently to improve its oil production. Qatar does have a very efficient oil company and gas company, but it isn’t at this point an expanding producer. Whatever happens in Iraq is going to take a long time. And there are little vulnerabilities here. For example, all of the oil that comes out of Iraq comes through two basically un-renovated oil platforms out in the Gulf that are themselves very, very vulnerable. As for Iran, obviously the president isn’t going out there to announce important increases in Iran’s future oil production. So I think one thing we are often losing sight of is that even if you get a cosmetic agreement, and oil goes down to, say, even $100 a barrel, it doesn’t solve the economic pressures involved, it doesn’t affect the long-term market, and it doesn’t affect the midterm market. So the best cosmetic outcome isn’t going to have any meaningful impact on the global economy or global energy supply. It just can’t work like that.

MR. ALTERMAN: Can I also amplify something I think was implicit in Tony’s comments. It’s easy to shorthand the trip to Saudi Arabia and say the president wants to get the Saudis to pump more oil. The U.S.-Saudi discussions are going to touch on Iran, Iraq, Arab-Israeli issues, counterterrorism – I mean, all issues, except for counterterrorism, issues where the Saudis say the U.S. capacity, the U.S. skill, the U.S. trustworthiness in fixing these problems is not something to have a lot of faith in. U.S. is trying to sell arms but can’t really get Congress on board. The Saudis don’t have an alternative to keeping the U.S. in its corner, but their reliance on the United States, their confidence in the United States is extremely shaken, and I think that contributes to Tony’s sense that they’ll be polite, but they’re not really going to put themselves out to help this president. In past years, the Saudis have really put themselves out to help American presidents. We saw what they did in Afghanistan. We saw what they did in Nicaragua. There have been any other number of instances where the Saudis said privately we really want to be your ace in the hole.

This relationship has been unalterably changed partly by the events of September 11th, partly by what’s happened in Iraq, partly by a Saudi sense that the United States isn’t nearly as competent as they thought. And while there is no alternative to the United States, there is suddenly a need to hedge against U.S. incompetence. That changes the whole way these meetings go, and it changes what happens when the U.S. president says I really need you to do this.

Contrast this with what happened in the Iraq war in 1991. and if you look at the history of the Middle East – I just did this for a presentation, so it’s on my mind. If you look at the history of the Middle East, oil prices spike when you have major conflicts in the U.S. They spiked in the 73 war. They spiked with the Iranian revolution. You look at the war with Iraq in ’91 and there is no spike and there is no spike because the Saudis pumped more oil and kept more oil prices steady. Not only that, the U.S. actually made a profit in the ’91 war because the Gulf allies contributed the costs of the war.

Contrast that to now. We’re not going back to that; we’re dealing with a very different reality; our allies in the Gulf really on us but don’t have nearly the confidence, and are going to continue to hedge against our incapacity and continue to look, as Tony very rightly said, at the growth markets, which are in South and East Asia, and not in the U.S. where our oil demand is actually diminishing.
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