This report discusses the political future of various countries in the Middle East-North Africa (MENA) region. A change in the leadership in these countries could significantly affect their policies toward the United States and their willingness to cooperate with the United States in achieving the stability needed to advance U.S. interests in this important region.

This report discusses the U.S.-Saudi military cooperation and the legislation seeking to condition or prohibit the sale or transfer of certain munitions after reports of Yemeni civilian casualties resulting from Saudi-led coalition military operations in Yemen

Deficient productive capacity has not yet caused an oil crisis, but that does not mean it never will. Significant increases in world oil demand will have to be met primarily from Persian Gulf supplies. This is a region with a history of wars, illegal occupations, soups, revolutions, sabotage, terrorism, and oil embargoes. To these possibilities may be added growing Islamist movements with various antipathies to the West. If oil production were constrained, oil prices could rise abruptly along with adverse world economic repercussions. If the IEA and EIA are correct on the demand side, deficient world oil productive capacity could cause an oil crisis within 15 years and political disruptions in Saudi Arabia could cause one sooner. However, if the increases in world oil demand were more moderate, and there is long-term relative peace in the Middle East, with increasing foreign participation in upstream oil activities, a business as usual world oil demand and supply situation would be a likely scenario for much of the next century.

The kingdom of Saudi Arabia, ruled by the Al Saud family since its founding in 1932, wields significant political and economic influence as the birthplace of the Islamic faith and by virtue of its large energy reserves. This report provides background information about Saudi Arabia and analyzes current issues in U.S.-Saudi relations.

Demand patterns for world oil and oil products show significant diversity by country, region, and product groupings. As a result of this diversity it is not possible to attach blame for the current level of price to any one nation, region, or product segment. The view that the oil market is international in scope and tightly interrelated is enhanced by the demand data. As a result of the integrated nature of the world oil market it is unlikely that any one nation acting on its own can implement policies that isolate its market from broader price behavior. As new major oil importers, notably China, and potentially India, expand their demand, the oil market likely will have to expand production capacity. This promises to increase the world’s dependence on the Persian Gulf members of the Organization of Petroleum Exporting Countries, especially Saudi Arabia, and maintain upward pressure on price.

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The United States and Saudi Arabia have long-standing economic and defense ties, and the U.S. has a strong security commitment to Saudi Arabia. Saudi Arabia was a key member of the allied coalition that expelled Iraqi forces from Kuwait in 1991. Bombing attacks against several U.S. and foreign-operated installations in Saudi Arabia have raised some concerns about security of U.S. citizens and what appears to be growing anti-Americanism in some segments of the Saudi population. Other principal issues of bilateral interest include security in the post-war Gulf region, the Saudi position on the Arab-Israeli conflict, arms transfers to Saudi Arabia, Saudi external aid programs, bilateral trade relationships and oil production, and Saudi policies on human rights and democracy.

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