Global Affairs Session 107 12 October 2026

THE END OF THE HOUSE OF SAUD?

A Kingdom Under Siege

The House of Saud: three states, one dynasty

1. Early origins: Saudi official chronology traces the first Saudi state to Muhammad bin Saud’s rule in Diriyah beginning in 1727.
2. Religious alliance: A 1744 pact with Muhammad ibn Abd al-Wahhab linked the Al Saud dynasty to a religious reform movement.
3. First defeat: Ottoman-Egyptian forces destroyed the first Saudi state in 1818 and ended its control of Diriyah.
4. Second state: Turki bin Abdullah re-established Saudi rule in 1824; the second state ended after defeat in 1891.
5. Modern reconquest: Abdulaziz Al Saud retook Riyadh in 1902 and consolidated authority across much of the Arabian Peninsula.
6. Kingdom founded: The Kingdom of Saudi Arabia was proclaimed in 1932; Abdulaziz became its first king, establishing modern dynastic rule.

Sources: Saudi Foreign Ministry, Saudipedia

Four relationships shaping Saudi strategy

1. United States: Washington and Riyadh maintain extensive security and economic ties, strengthened by a strategic defense agreement signed in 2025.
2. Iran: Diplomatic relations resumed under a China-brokered agreement in 2023, but Yemen and regional warfare remain major points of tension.
3. Israel: Saudi Arabia has not established diplomatic relations with Israel and links normalization to a credible Palestinian statehood pathway.
4. GCC partners: Saudi Arabia belongs to the six-member Gulf Cooperation Council, alongside Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates.
5. United Arab Emirates: Saudi and Emirati interests intersect in trade and security, while competition and disagreements over Yemen complicate cooperation.
6. Current diplomacy: Saudi and Iranian foreign ministers spoke on 11 October 2026 following Houthi attacks, illustrating continued diplomatic communication.

Sources: White House, Saudi/Chinese 2023 statement, Reuters

Yemen: from intervention to renewed war

1. 2014–2015 origins: The Houthis seized Sanaa in 2014; a Saudi-led coalition intervened in March 2015 supporting Yemen’s internationally recognized government.
2. Long conflict: Years of civil war, airstrikes and economic disruption created severe humanitarian consequences for Yemen’s civilian population.
3. 2022 truce: A United Nations-brokered truce began in April 2022, reducing large-scale cross-border attacks despite unresolved political divisions.
4. 2026 escalation: Fighting intensified in 2026 around Yemen’s Red Sea coast and the strategically important Bab el-Mandeb shipping route.
5. Saudi response: Saudi-backed Yemeni forces launched ground offensives while Saudi-led aircraft struck Houthi positions during the October escalation.
6. Houthi strikes: Houthi-claimed attacks hit Riyadh airport on 10–11 October, killing civilians and disrupting international passenger flights.

Sources: UN, AP, Reuters, October 2026

October 2026: six immediate pressures

1. Airport attacks: Riyadh’s international airport suffered repeated strikes in October, causing civilian deaths, hundreds of injuries and cancelled flights.
2. Growth reversal: The Saudi Finance Ministry estimates a 3.6% real GDP decline for 2026, mainly from falling oil activity.
3. Fiscal gap: The 2027 pre-budget statement projects spending of SAR 1.392 trillion against revenue of SAR 1.202 trillion.
4. Vision 2030: Saudi authorities continue diversification, while major developments face reassessment, including the indefinitely shelved NEOM World Cup stadium.
5. Shipping disruption: Conflict near Bab el-Mandeb and restrictions around Hormuz have complicated oil exports, shipping insurance and regional logistics.
6. Regional war: The wider United States–Iran confrontation has disrupted Gulf trade and security, increasing uncertainty for governments and investors.

Sources: Reuters, Saudi Ministry of Finance, IMF

Could the monarchy fall? What evidence exists

1. No verified breakdown: There is no verified evidence of an imminent collapse of Saudi central government or an organized royal overthrow.
2. State capacity: Saudi Arabia retains functioning ministries, armed forces, critical infrastructure and established mechanisms for royal succession.
3. Financial buffers: The IMF reported substantial foreign exchange reserves, a large sovereign wealth fund and manageable public debt.
4. External security: The kingdom maintains defense partnerships with the United States and other countries despite uncertainty surrounding regional hostilities.
5. Real vulnerabilities: Military attacks, oil dependency, fiscal deficits and project delays are documented pressures requiring continued policy responses.
6. Evidence standard: Predicting regime change would require stronger evidence, including documented institutional fractures, nationwide unrest or loss of governing control.

Sources: IMF Article IV 2026, Saudipedia, Reuters

If rule changed: conditional global effects

1. Leadership transition: A succession within the existing monarchy would differ substantially from a breakdown of state institutions or territorial control.
2. Oil supply: Severe disruption to Saudi oil production or exports could affect global prices, refined products and importing economies.
3. Energy investment: Institutional instability could complicate Saudi Aramco operations, contracts, financial commitments and the timing of major investments.
4. Regional security: Neighboring Gulf states and major partners would face decisions about borders, defense coordination and protection of maritime trade.
5. Religious stewardship: Any major governance change would raise administrative questions concerning Mecca, Medina and the annual Hajj pilgrimage.
6. Distinct outcomes: Orderly succession, constitutional restructuring and state fragmentation are different hypothetical scenarios; none should be presented as established events.

Illustrative contingencies; evidence: EIA, IMF, Saudi government

Petrodollars, Iran and two maritime chokepoints

1. Dollar pricing: Saudi oil is predominantly traded in dollars; no verified exclusive fifty-year treaty required all Saudi oil sales in dollars.
2. Riyal peg: The Saudi riyal remains pegged at approximately 3.75 to the United States dollar, anchoring monetary policy.
3. Hormuz route: The Strait of Hormuz carried approximately 20.9 million barrels per day of petroleum liquids in the first half of 2025.
4. Red Sea route: Bab el-Mandeb carried approximately 8.1 million barrels daily in the second quarter of 2026, according to EIA estimates.
5. Iranian dimension: Iran supports the Houthis, but their own Yemeni political goals mean their decisions cannot simply be equated with Tehran’s.
6. Diplomatic channel: China brokered Saudi-Iranian normalization in 2023, and ministerial contact continued during the October 2026 escalation.

Sources: EIA 2026, IMF, PolitiFact, Reuters

Conclusion

Saudi Arabia faces documented security threats, economic contraction and difficult choices over Yemen, oil and ambitious development projects.

Imminent physical dynastic collapse is not visible, but influence collapse is. KSA’s institutions, financial buffers and partnerships remain consequential.

The future should be assessed through observable events.

Value addition

Glossary and related terms

House of Saud / Al Saud

The Saudi royal dynasty discussed in the lecture, from its early origins in Diriyah to the modern kingdom.

Diriyah

The settlement associated with the beginning of the first Saudi state under Muhammad bin Saud in 1727.

First Saudi State

The earlier Saudi polity beginning in 1727 that the presentation says ended after Ottoman-Egyptian military action in 1818.

Second Saudi State

The Saudi state re-established by Turki bin Abdullah in 1824 and defeated in 1891.

Wahhabi reform movement

A religious reform movement associated in the lecture with Muhammad ibn Abd al-Wahhab and the 1744 alliance.

Dynastic succession

The transfer of monarchical leadership within the royal family, distinct from the overthrow or fragmentation of the state.

Crown Prince

A royal position associated with succession; the lecture’s family-relationships images discuss Crown Prince Mohammed bin Salman.

Gulf Cooperation Council (GCC)

A six-member Gulf regional organisation: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

Diplomatic normalization

The restoration or establishment of formal state-to-state relations, such as the Saudi-Iranian diplomatic agreement of 2023.

Palestinian statehood pathway

The credible route towards Palestinian statehood that the lecture says Saudi Arabia connects to potential Israel normalization.

Houthis

A Yemeni movement that seized Sanaa in 2014 and features in the lecture’s account of the Yemen conflict and later attacks.

Sanaa

The Yemeni capital mentioned in the account of the Houthis’ seizure of the city in 2014.

Saudi-led coalition

The military coalition described as intervening in Yemen in March 2015 in support of Yemen’s internationally recognized government.

UN-brokered truce

The April 2022 Yemen ceasefire arrangement discussed as reducing large-scale cross-border attacks.

Bab el-Mandeb

The maritime passage between the Red Sea and the Gulf of Aden, significant for shipping and security in the Yemen conflict.

Strait of Hormuz

A key Gulf maritime route for petroleum shipments, discussed alongside Bab el-Mandeb as a regional chokepoint.

Maritime chokepoint

A narrow shipping route where disruption can affect international trade and energy transportation.

Vision 2030

Saudi Arabia’s programme of economic diversification, discussed in relation to fiscal constraints and large development projects.

NEOM

A major Saudi development initiative shown in the slide comparing initial ambitions with delayed or scaled-back projects.

Real GDP contraction

An inflation-adjusted decline in economic output. The presentation cites a Saudi Finance Ministry estimate for 2026.

Fiscal deficit

The shortfall when government spending exceeds government revenue; the lecture includes figures from a 2027 pre-budget statement.

SAR

Saudi riyal, the monetary unit used for the fiscal amounts in the lecture.

Foreign-exchange reserves

Financial assets held in foreign currencies, identified in the lecture as one potential financial buffer.

Sovereign wealth fund

A state-owned investment fund, mentioned in the discussion of Saudi financial buffers.

Saudi Aramco

The Saudi oil company whose activities and investment obligations feature in the hypothetical governance-change scenarios.

Petrodollar

A term describing dollar-denominated oil trade; the lecture distinguishes prevalent dollar pricing from an alleged mandatory exclusive treaty.

Currency peg

An exchange-rate arrangement fixing or closely maintaining a currency against another currency; the presentation cites the Saudi riyal’s approximate 3.75-per-dollar peg.

Hajj

The annual Islamic pilgrimage to Mecca, considered in the slide on potential consequences of major governance change.

State capacity

The continuing ability of a government to operate ministries, infrastructure, security services and succession mechanisms.

Regime change

A major shift in governing leadership or political order. The lecture says predictions require evidence rather than assumption.

Institutional fragmentation

A hypothetical weakening or break-up of governing structures, distinguished in the lecture from normal royal succession.

Conditional scenario

An illustrative possible outcome, not a report that the event has occurred or a prediction that it will occur.