BREMMER: 'Saudi Arabia is in serious trouble, and they know it'

Saudi Arabia’s growing international isolation — and Iran’s rising regional influence — has led the kingdom to “double down” on protecting its interests, according to a new analysis of the world’s top 2016 risks by Eurasia Group, the world’s largest political risk consultancy.

That at least partly explains the Kingdom’s decision to sever diplomatic ties with Iran on Sunday, after Iranian protesters ransacked and set fire to the Saudi embassy in Tehran over Saudi Arabia’s execution of prominent Shiite cleric Sheikh Nimr al-Nimr.

On Monday, Saudi Arabia moved to cut off all commercial ties with Iran, according to Reuters, and ban its citizens from travelling there.

“Saudi Arabia is in serious trouble, and they know it,” Ian Bremmer, president of Eurasia Group, told Business Insider on Sunday.

The Kingdom of Saudi Arabia (KSA) is “much more challenged on the economic front, more isolated regionally and globally, and beset with succession issues (given the King’s controversial son),” Bremmer said, referring to King Salman’s newly empowered, 30-year-old son, Mohammed bin Salman.

He added: “They hate the international attention on them given the growing ISIS concerns and want to make regional tensions an Iran story, which helps them domestically. All of which leads toward escalation.”

Al-Nimr, a Shiite cleric and outspoken critic of Saudi Arabia’s treatment of its Shiite Muslim minority, was executed on charges of inciting domestic terrorism and plotting to overthrow the Saudi government.

Iran protested the grouping of al-Nimr — a cleric in his mid-50s known for his fiery rhetoric — with hardline jihadists executed by Saudi Arabia for their alleged ties to Al Qaeda. Iranian Supreme Leader Ayatollah Ali Khamenei predicted “divine vengeance” over al-Nimr’s execution.

By cutting ties with Iran, Saudi Arabia also shifts public attention away from its domestic problems, which include $40 oil and growing political instability stemming from rivalries within the Saudi royal family.

“We are determined not to let Iran mobilize or create or establish terrorist cells in our country or in the countries of our allies,” Saudi Foreign Minister Adel al-Jubeir said at a news conference in Riyadh on Sunday. “We will push back against Iran’s attempts to do so.”

Indeed, some analysts say that the KSA’s execution of al-Nimr stemmed from a desire to push back against Iran and its allies.

“The key source of Saudi anxiety is Iran. Soon to be free of sanctions, Iran’s economy will strengthen, and its government will have more money to spend in support of regional clients,” Eurasia Group noted in its 2016 risk analysis.

As strategic security intelligence firm The Soufan Group noted in its daily briefing, however, “If the execution of Sheikh Nimr is intended to take the minds of Saudi’s Sunni population off the recent 40% price hike in gasoline and point the finger at an external enemy as the cause of current economic woes, it may not be enough.”

The group added: “To pursue that line of exculpation, the Saudi royal family will have to continue to escalate its rhetoric and action against Iran.”

Any action Saudi Arabia takes against Iran, and vice versa, will likely be indirect. Neither country wants to become embroiled in a direct conflict, Abbas Kadhim, a senior foreign policy fellow at the School for Advanced International Studies at Johns Hopkins University, told The New York Timeson Monday.

“These countries don’t trust one another, and they see every event as an opportunity to raise tensions,” Kadhim said. “Both countries will try their best to try to fortify their proxies and their activities, which is going to create more trouble.”

Saudi Arabia and Iran are locked in a proxy war in Syria, where Iranian-backed Shiite militias are fighting Saudi-backed Sunni rebels battling to overthrow the regime of Syrian President Bashar al-Assad.

Iran and Saudi Arabia also support opposing sides in Yemen, where Saudi Arabia has been launching airstrikes against the Iran-backed Houthi rebels since March.

“While a shooting war with Iran is unlikely, the kingdom will push back wherever it views Tehran as gaining advantage,” Eurasia Group wrote in its analysis of the new year’s top geopolitical risks. “More generally, expect an isolated and domestically weaker kingdom to lash out in new ways.”

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