Saudi Arabia’s execution of Shia cleric Sheikh Nimr al-Nimr has exposed the dangerous political, religious and socio-economic fault lines which run through the kingdom and the Gulf.
News of the execution sparked some unrest among Shia communities in Saudi Arabia’s oil-rich Eastern Province and in neighbouring Bahrain as well as in southern Iraq.
Iran’s supreme leader effectively called for the overthrow of the Saudi monarchy, drawing a furious response from the Saudi government, which accused the Islamic Republic of interfering in the kingdom’s internal affairs.
Iranian protesters stormed the Saudi embassy in Tehran, and Saudi Arabia responded by breaking off diplomatic relations and encouraging allied Sunni governments to do the same.
Saudi Arabia’s ambassador to the United Nations (UN) told reporters on Monday “we are not natural born enemies of Iran”.
But restoring diplomatic relations would only be possible if Iran were to “cease and desist from interfering in the internal affairs of other countries, including our own”.
The rivalry between the two big powers in the Gulf is often simplified to a contest between a conservative Sunni monarchy and a revolutionary Shia republic; the reality is more complicated and worrying.
Saudi Arabia’s Eastern Province lies at the dangerous intersection of great power rivalry between Iran and Saudi Arabia, sectarian conflict between Sunni and Shia, social and economic grievances, and the world’s largest oil reserves.
Researchers at Columbia University have put together an outstanding collection of maps illustrating the cultural, religious, tribal and linguistic divisions across the Gulf region.
They show Shia majority areas stretching in an arc up through Iran, across southern Iraq and down along the eastern coast of Saudi Arabia into Bahrain, with a further output in the highlands of northern Yemen.
Iran has taken a special interest in the Shia communities in all these countries; and in some cases the government in Tehran, especially the Revolutionary Guards and other elements, have tried to export their influence.
But it is also clear that many of these Shia communities have strong local grievances and much of the unrest has local roots rather than simply being stirred up by Iran.
Shia communities in Iraq, Bahrain and Saudi Arabia have all suffered discrimination and marginalisation at the hands of Sunni-dominated governments and societies over the last century.
What adds to the destabilising cocktail is that areas that are home to many Shia communities are also where most of the region’s oil and gas fields and remaining reserves are.
Southern Shia-dominated Iraq contains far more oil and gas than the Sunni-majority areas in the centre of the country.
And in Saudi Arabia, Eastern Province is where almost all the country’s oil and gas reserves are to be found.
Conditions in the Eastern Province remain relatively opaque because access and reporting are controlled by the Saudi government, which also strongly discourages international discussion about political risks affecting the kingdom.
The potential for serious unrest is one of those low probability, high consequence risks that are difficult to estimate properly but which should not be ignored.
Unrest remains a tail risk rather than a central risk. It is much more likely the Eastern Province will remain peaceful, and much less likely that it will see social upheaval.
No one will make money betting on political instability in Saudi Arabia or unrest in the oilfields because the probability in any given year is low.
The risk of unrest could be as low as 5 per cent or even 1pc but that is not the same as zero. The same could have been said about the risk of upheaval in Egypt or Tunisia before 2011.
The risks are real enough that they are perceived as a serious danger by the Saudi government, which continues to maintain a heavy security presence in the area, and they help explain why the confrontation between Riyadh and Tehran is so bitter and so personal.