We are on the same page.
This was triangulation with Persians and Arabs vying for most favored nation in the Gulf area.
At that time, the arabists in both the British and American Foreign Affairs bureaus tilted towrd the Saudi Arabs.
Khomeini, after taking power attempted to finance and organize to overthrow Khalid, which in turn the Saudi’s financed Saddam in going to war with Iran.
This is where the religious rivalry came into play.
There was the subsequent attempted takeover of the Grand Mosque in 1979. At the time it was believed that it was an attempted Shiite overthrow, bi=ut according to this link, the leaderhip of the coup was Sunni Wahbbi: http://www.fsmitha.com/review/trofimov2.html
Much of what was going on is still unclear.
The Grand Mosque siege was done by the Bedouins that made the backbone of the army and helped the House of Saud gain power in the first place. The issue was Khalid was liberalizing the economy which was greatly advancing the Saudi’s forward. The Bedouins were very religiously strict to the point that in their opinion modernity and Mohammedanism were not compatible. They viewed that Khalid was liberalizing his religious views, thus the seizure of the Grand Mosque. It was this event that led to the creation of SA National Guard.
I was reading through book on Google Books, that was written about the Persian Gulf. Prior to the revolution all the countries around the Gulf were monarchies (with the exception of Iraq) and were getting along very well. The 1960s was a time that border disputes were being settled and trade agreements being made. The Saudi’s were very anti-Communists and thus the champion of US policy there (with the exception of Israel), but after the overthrow of the Shah that changed. Evidently the Saudi’s even knew that something wasn’t right and that the US had something to do with the revolution. The thought occurred that if the US could overthrow a monarch that they originally put in place, then they could do the same to the House of Saud. So Fahd starting looking for alternatives to US patronage.
This could of been the catalysts that cause the Saudi’s playing the double agent game that they have been doing for the past few decades.
How about this. leading up to ‘74, the petrodollars coming into Iraq, Iran and Saudi Arabia has tripled over the past three years to the tune of 6.8B, 17.5B and 22.5B. These created huge surpluses in their budgets which required somewhere to put. The Saudi’s are concerned about the fact that Iran and Iraq have larger populations and exhibit aggressive foreign policies. The concern being that the ensueing arms race is creating a imbalance of power in the Gulf. Plus the Shah is wanting to keep oil prices up. Before the Oil Embargo a barrel or oil was over $4. by the start of the embargo we see $8/barrel. The US cuts a deal with the Saudi’s to lower the price inexcahnge for huge military aid. But at the OPEC conference of ‘74 in Tehran, Iran had gotten $17/barrel in an oil auction and decides that OPEC should all raise the price to this level. Saudi’s balked, because they want to lower it. The group agrees on $11/barrel. But the Shah continues to agitate for high prices and threatens any Gulf state that cuts prices or increases production with war. The Saudi’s had planned on cutting prices and then selling the excess at auction. They refrain from selling excess at auction.
So the Shah continues to agitate for higher prices, the contract with BP is running out and thus Iran will be more independent with their oil.
1. Saudi Arabia (as the Bank of the Arab World) supports the overthrow of the Shah to restore balance of power in the Gulf.
2. US/UK overthrows Shah in hopes to getting better oil deal with new regime, but oops that back fires. New regime doesn’t want to play ball either, so now the West puts embargo on new regime.