Conservative Saudi Arabia and revolutionary Iran are locked in a struggle for control over the oil-wealthy sheikdoms strung out along the Arab side of the Persian Gulf. The outcome could well determine which country emerges as the dominant power in the gulf as well as the survival of the Saudi monarchy.
The conflict has become entwined in the 26-month-old war between Iran and Iraq, with the Saudis depending on the Iraqis to hold the Iranians at bay while they seek to incorporate the vulnerable sheikdoms into a Saudi-dominated and U.S.-supported collective security arrangement.
The Iranians are using the carrot and stick to woo the sheikdoms away from the Saudi orbit and get them to halt their sizable aid, primarily billions of dollars in loans, to the Iraqi side. There are signs the Iranians are having some success, to the consternation of the Iraqis and Saudis.
Underlying the struggle for dominance over the world's oil heartland, where 56 percent of all known reserves are located, is the dynamism of Iran's Islamic revolution, whose Shiite apostles say they seek to bring down the socialist Baath government of Saddam Hussein in Iraq on the one hand and overthrow the Saudi monarchy on the other.
The conflict between these two fundamentalist Islamic states -- Saudi Arabia a close ally of the United States and Iran its bitter enemy -- seems to be worsening, and, along with the Iranian-Iraqi war, it is totally consuming the politics of the gulf.
Last December, the authorities here arrested 73 Iranian-trained dissidents who were intent on overthrowing the ruling Al Khalifa family and establishing a Khomeini-style revolutionary Islamic state. Western diplomatic and Bahraini sources say Iran's Revolutionary Guards are still training gulf revolutionaries in two camps where the 73 were indoctrinated and that there is another one operating in Syria.
The Iranians are recruiting mainly among the Shiite communities in the Arab gulf states. Shiite Moslems make up at least 60 percent of Bahrain's 350,000 people and constitute small, but politically active minorities in several other gulf states, including Kuwait and Saudi Arabia.
Since last December's unsuccessful coup, Bahrain is reliably reported to have expelled by boat 200 to 300 suspected Shiite dissidents while Kuwait has thrown out 20,000 foreigners, mostly Shiites, thus providing the Iranians with plenty of potential recruits for their training camps.
The Iranian challenge to Saudi religious and political leadership was most recently laid down in late September during the annual pilgrimage to Mecca, when thousands of Iranian Shiite zealots staged demonstrations in favor of Ayatollah Ruhollah Khomeini and tried to proselytize among the 2 million Moslem pilgrims in attendance.
After a series of violent clashes, the Saudi authorities finally expelled 100 Iranians including their leader, Hojatoleslam Mousavi Khoiniha.
The Iranians had already made clear their revolutionary intentions in early June by sending their deputy foreign minister, Hossein Sheikholeslam, to Abu Dhabi to tell its ruler, Sheik Zayid Sultan Nuhayan, that their main target after the war with Iraq ends is Saudi Arabia.
This message was relayed to David Steel, leader of the British Liberal Party, who was then also visiting Abu Dhabi, according to a member of his delegation.
The "cold war" between Saudi Arabia and Iran is not just a matter of words, either. The two are at loggerheads inside the Organization of Petroleum Exporting Countries, with Iran flouting its production quota and selling its oil as low at $29 a barrel, undercutting the Saudi benchmark price by $5.
As a result of its price war, Iran has been able to push up its production to 2 million barrels a day, despite the soft world market, while that of Saudi Arabia has tumbled to 5.5 million barrels, a cutback of nearly one-half in less than two years.
The mounting pressures and counterpressures were very much in evidence at a summit here of the six members of the Arab Gulf Cooperation Council earlier this month.
The council was created just 18 months ago, partly in response to the threat from Iran's Islamic revolution and the Iranian-Iraqi war and partly as a result of long-standing efforts by Kuwait and Saudi Arabia to bring the vulnerable Arab monarchies closer together.
The grouping comprises Oman, the United Arab Emirates, Qatar and Bahrain in addition to Saudi Arabia and Kuwait, and deliberately excludes Iraq on the ground that it has a socialist economic and republican political order.
The six constitute only a fraction of the Arab world's total population -- 10 million to 11 million of its roughly 140 million people. But they produce currently 7 million to 8 million barrels of oil daily, more than 40 percent of OPEC's total. They also account for 20 percent of U.S. imports, 56 percent of Europe's and nearly 70 percent of Japan's.
Here at the council's third summit, the Saudis pushed hard for a strong condemnation of Iran and hoped to sign a collective internal security accord as well as a defense pact. They were also reportedly seeking to raise billions of dollars in additional financial aid -- $35 billion according to some accounts -- to help Iraq finance its war against Iran. Already, the six have provided Iraq somewhere between $25 billion and $30 billion in loans and grants.
The Saudis were thwarted on all three accounts, although the six did agree on the first steps to be taken toward setting up a common market starting March 1 as well as approve the principle of closer coordination among their meager armed forces.
The reasons for the lack of agreement here on a common stand toward Iran or the immediate conclusion of a collective security and defense pact are numerous. But among the most troubling to the Saudis is the clear trend by two of its Arab Gulf allies -- the United Arab Emirates and Kuwait -- to seek accommodation rather than increased confrontation with Iran and to keep some independence of action from the kingdom in security and defense affairs.
The emirates' ruler, Sheik Zayid, in particular has responded positively to Iranian overtures since last spring. A number of high-level Iranian officials, including Foreign Affairs Minister Ali Akbar Velayati, have visited Abu Dhabi offering enticements such as trade deals and a joint bank.
Earlier this month, Iran announced that it was sending its ambassador back to Abu Dhabi, a clear indication of both sides' interest in improving relations even at a time when those between Tehran and Riyadh are steadily deteriorating.
Kuwait has also tried to keep its door open to Tehran although it has continued to serve as a transit point for goods and war materiel going to Iraq.
Wedged between Iraq and Iran at the top of the Gulf, Kuwait, a city state of only 1.4 million, has long sought to maintain a balanced and "neutral" foreign policy among its powerful neighbors and to keep a measure of independence from Saudi Arabia.