Neighbors' instability, plunging oil prices, demands at home pose challenges for Saudi king

Saudi Arabia's new monarch inherits the throne at a moment when the oil-rich kingdom is being buffeted by a plunge in the value of its most valuable commodity, growing challenges by activists at home and deepening turmoil on its borders that stands to benefit rival Iran.

Those who know King Salman bin Abdul-Aziz Al Saud note the 79-year-old's diplomatic skills, honed over nearly five decades as governor of the capital, Riyadh. Those abilities will be put to the test as he positions his country to confront a collapsing Yemen on its southern frontier and threats from the extremist Islamic State group to the north in Iraq.

But he is unlikely to bring fundamental changes to the country's policies and its embrace of the ultraconservative Wahhabi brand of Sunni Islam.

Saudi kings derive their legitimacy through the support of the clerical establishment, limiting the potential for radical change. Salman already has had plenty of opportunity to put his stamp on Saudi policies, both in his role as defense minister since 2011 and as he increasingly took over duties for his half brother, King Abdullah, who died early Friday.

Salman made clear he has no intention to shift course in a nationally televised address hours after he succeeded Abdullah, vowing to hew to "the correct policies which Saudi Arabia has followed since its establishment."

His biggest immediate crisis is how to deal with deeply impoverished Yemen, which is home to what the U.S. sees as al-Qaida's most dangerous branch. Its militants have infiltrated the porous border to launch attacks against the OPEC heavyweight.

Yemen's U.S. and Saudi-backed president, Abed Rabbo Mansour Hadi, quit just hours before Salman ascended to the throne, driven out by pressure from Shiite rebels known as Houthis who control the capital of Sanaa. The rebels have been accused of being backed by overwhelmingly Shiite Iran, although the Houthis deny any links.

"Their greatest worry is what's going on in Yemen, which is very much their backyard," said Simon Henderson, director of the Gulf and Energy Policy Program at The Washington Institute.

Salman Shaikh, director of the Brookings Doha Center in Qatar, said that from a Saudi perspective, the advances by the Houthis in Yemen add to a "sense of encirclement by Iran," which is deepening its ties with Shiite-led Iraq and is the main regional patron for embattled Syrian President Bashar Assad.

The Sunni monarchy of the Gulf island nation of Bahrain, a favorite getaway spot for Saudis just off the kingdom's coast, has failed to quell unrest led by its Shiite majority despite political and security backing by Riyadh.

Of more concern, Iraq and a U.S.-led coalition that includes Saudi air power is struggling to beat back the extremists of the Islamic State group across Saudi Arabia's northern frontier. Earlier this month, gunmen with belts of explosives attacked a Saudi security patrol near the kingdom's 745-mile (1,200-kilometer) border with Iraq, killing three soldiers and wounding at least three more. Saudi Arabia swiftly gave shoot-to-kill orders to all border patrol afterward.

Saudi Arabia took a dim view of former Iraqi Prime Minister Nouri al-Maliki, and Riyadh had been taking steps to mend ties with Iraq's new leadership even before Salman's ascension. It announced this month that it was considering reopening an embassy in Baghdad for the first time in more than two decades.

Aziz Jaber, a political science professor at Baghdad's Mustansiriyah University, said Salman has no choice but to try to defuse political and sectarian tensions "because the chaos in the region has reached its peak, and danger is knocking everybody's door."

A nearly 60 percent drop in oil prices since summer could limit Salman's ability to maneuver in the long run.

The kingdom relies on oil revenues to fund most of its expansive budget, which covers lavish payouts to royal family members as well as perks such as subsidized fuel and large numbers of public-sector jobs to ordinary Saudis.

While the country has hundreds of billions of dollars in cash reserves stashed away, lower oil prices give it less flexibility to maintain spending levels at home and to influence its policies abroad. Current oil prices of below $50 a barrel are well short of what the kingdom needs to balance its budget — $89 a barrel in 2013, according to the International Monetary Fund.

As OPEC's biggest oil exporter and one of the world's largest producers, Saudi Arabia has the ability to cut output significantly to try to drive up prices. It hasn't shown willingness to do so for now, preferring to maintain market share and pressure higher-cost producers rather that trim its own production. That policy, which has dealt a blow to Iran and its backer, Russia, is unlikely to change in the near future, analysts say.

"The Oil Ministry is largely headed by technocrats, and so it is relatively shielded from changes in the kingdom's political environment," Jason Tuvey, Middle East economist at Capital Economics, wrote in a report Friday.

Ruling family members are nonetheless involved in the country's biggest industry. One of Salman's sons, Prince Abdulaziz, is the deputy oil minister.

Salman faces plenty of pressures at home too.

Within his own family, he bolstered those closest to him. Salman's designated heir, 69-year-old Prince Muqrin, is the youngest of the sons of Saudi Arabia's founder, King Abdul-Aziz Al Saud.

Salman also named a second-in-line to the throne, Interior Minister Prince Mohammed bin Nayef, who is the son of Salman's late full brother Nayef. He also named one of his sons who is in his 30s, Prince Mohammed bin Salman, as defense minister.

A ballooning youth population is putting pressure on the ruling family to do more to create well-paying jobs in the country, where more than half of the population of 20 million is under 25. Doing so will likely involve enticing more private-sector companies to a country where more than two-thirds of employed citizens work for the government.

Officials said last month that half of all public expenditures go for wages and allowances, so any cuts risk stirring resentment and undoing much of the goodwill generated by the extra spending that Salman's predecessor put in place after the 2011 Arab Spring.

The rapid rise of social media is also upending old assumptions, giving greater voice to everyone from young jihadists to Saudi women protesting restrictions on driving in the kingdom. The Arab Spring, while limited in the kingdom, also exposed younger generations to the possibility of challenging long-entrenched Arab regimes.

Salman will need to decide how harshly his government will deal with activists who test the limits of freedom in the ultraconservative country.

The kingdom, for instance, has come under renewed scrutiny from rights groups over its decision to publicly flog Raif Badawi. He was sentenced last year to 10 years in prison and 1,000 lashes meted out over 20 sessions for criticizing Saudi Arabia's clerics and mocking the country's morality police on a blog that he founded. The first round of lashes was administered this month. Another Saudi man was recently arrested for filming a woman's public beheading and posting it online.

Salman's predecessor took some modest steps to empower women, including giving them seats on the government's advisory Shura Council and allowing them to participate in the Olympics for the first time in 2012.

But many limits on women's freedom remain. They cannot, for example, travel or marry without a male guardian's permission. Saudi women are increasingly challenging those strictures, particularly the prohibition on driving, by getting behind the wheel. Those acts of defiance are not likely to abate under Salman.

"People you talk to, they are much more willing to raise their voice now than before," said Ali al-Ahmed, director of the Washington-based Institute of Gulf Affairs. "When Abdullah came, people had high hopes. I don't think that is there now. ... People think of (Salman) as another Al Saud prince who is not willing to share power, so I think people are going to accelerate their demands."

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Associated Press writer Sameer N. Yacoub in Baghdad contributed reporting.

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