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Saudis expect dividends from their help to Reagan; US softens on PLO, hardens on Israeli settlements; Riyadh calling in summer's IOUs

The Saudis are calling in their IOUs from the United States -- earned during their summer of crisis diplomacy -- but it is unlikely they will use oil leverage to ensure collection.

This is the assessment of Arab analysts who specialize in Saudi Arabia's Mideast and oil policies.

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They say the diplomatic relationship between the US and Saudi Arabia has grown close and mutually dependent this summer and that Saudi Arabia is expecting something for its efforts to quench brushfires between Syria and Israel, among Lebanon's warring factions, and between the Palestinians and Israelis.

But they rule out Saudi oil pressure as a means to Saudi ends.

An indication of what the Saudis have in mind came from Crown Prince Fahd Ibn Abdul Aziz last week. In an eight-point plan, drawn from existing United Nations resolutions, he asked for concessions from Israel (and by implication, the US) on the Palestinian issue. In return he hinted at Arab recognition of Israel's existence.

Israel rejected Prince Fahd's proposals, although Deputy Prime Minister Simcha Ehrlich said they represented a breakthrough in the area of Arab recognition of Israel.

The Saudi weekly newspaper Ash Sharq al-Awsat, meanwhile, quoted diplomatic sources as saying Fahd further was requesting (1) that the US recognize the Palestine Liberation Organization, (2) that the US recognize the Palestinians' right to a homeland, (3) that Israel withdraw from occupied territory, and (4) that AWACS surveillance planes be approved for sale to his kingdom.

The newspaper said Prince Fahd had threatened to cancel a visit to Washington this fall if the US did not comply with these requests.

An Arab specialist on Saudi Arabia says Fahd's requests amount more to an expression of Saudi attitudes than to a formulated Saudi policy.

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This source, who has proven reliable on Saudi affairs in the past though he is rather critical, says Fahd's proposals come as more of a "wish list" than as demands or parts of a firmly adhered to strategy. He believes Saudi Arabia is not prepared to use its greatest weapon, oil, to win these requests.

Moreover, he observes that Prince Fahd is in a relatively more conciliatory frame of mind toward Israel than he was a year ago.

"Last year at this time," he says, "Prince Fahd made a call for jihad [holy war] against Israel. That did no good and quite a lot of harm. If anything he has softened between then and now. He is at least implying recognition of Israel [in his eight-point plan]."

Several Western specialists on the Mideast have contended in recent months that Saudi diplomacy is primarily "names and good offices." They say that below the level of crisis managers such as Fahd and Foreign Minister Prince Saud al-Faisal there is little in the way of a policy implementation bureaucracy.

But while Saudi Mideast policy may be made up of desires and one-man shows, Saudi oil policy is firmly outlined -- indeed, has been for seven years. It is moderation. And this is why these sources believe there will be no linkage between oil and Mideast politics at the moment -- at least not a link that uses oil punitively against the US.

Longtime OPEC watchers say it is possible that at an impending OPEC ministers' meeting (most likely to be held Aug. 19 in Geneva) the Saudis will cut back production to reduce the worldwide oil surplus. But this cutback will be only modest.

A major cutback designed to influence Reagan administration thinking would run counter to the Saudi policy of bringing OPEC into line behind Saudi "marker crude" so that gradual, inflation-indexed price rises can occur in the 1980s.

"Today the Saudis and other Arabs think that the political problems involved in using oil as leverage on the US are too risky," the Saudi watcher says. A Western diplomat in Jordan calls the oil weapon, "a weapon of desperation," not a tool of diplomacy.

A president such as Mr. Reagan, the reasoning goes, would be angered by oil coercion and might become more rigid on his Mideast policies. Many Arab officials interviewed in recent weeks have told the Monitor they are encouraged by an apparent Reagan administration reassessment of its relationship with Israel. Arab bullying, they fear, might bring this to an end.

On the other hand, by setting out Arab desires, as Prince Fahd and Egyptian President Anwar Sadat have done in recent days, and by maintaining the oil surplus, the Arabs are creating incentives for the US to move in their direction.

This has been Saudi policy since 1974, Arab sources maintain, adding that it has caused more sympathy toward Arabs from Europe in that time. It will not be abandoned now, they say.

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