Saudi Arabia Terrorism, U.S. Relations and Oil

Saudi Arabia, a monarchy ruled by the Saud dynasty, enjoys special importance in much of the international community because of its unique association with the Islamic religion and its oil wealth. Since the establishment of the modern Saudi kingdom in 1932, it has benefited from a stable political system based on a smooth process of succession to the throne and a prosperous economy dominated by the oil sector. With one-fourth of the world's proven oil reserves and some of the lowest production costs, Saudi Arabia is likely to remain the world's largest net oil exporter for the foreseeable future. During January-October 2004, Saudi Arabia supplied the United States with 1.5 million barrels per day of crude oil, or 15%, of US crude oil imports during that period. The September 11, 2001 attacks fuelled criticisms within the United States of alleged Saudi involvement in terrorism or of Saudi laxity in acting against terrorist groups. Of particular concern have been reports that funds may be flowing from Saudi Arabia and other Middle East countries to terrorist groups, largely under the guise of charitable contributions. Critics of Saudi policies have cited a number of reports that the Saudi government has permitted or encouraged fund raising in Saudi Arabia by charitable Islamic groups and foundations linked to Osama bin Laden's Al Qaeda organisation or like-minded entities.