US AND IRANIAN STRATEGIC COMPETITION The Gulf and the Arabian Peninsula Anthony H. Cordesman and Robert M. Shelala II Anthony H. Cordesman Arleigh A. Burke Chair in Strategy
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[email protected] VI. US Competition with Iran: The Gulf and Arabian Peninsula AHC December 30, 2012 ii EXECUTIVE SUMMARY The Gulf and the Arabian Peninsula is the most important single theater in the US-Iranian strategic competition. The proximity of the Arab Gulf states to Iran; the region’s geostrategic value to the stability of the global economy; the shifting military balance; and the social, demographic, and economic tensions that threaten to create political upheavals in several key states make it a potential flash-point in tensions between Washington and Tehran. While each state in the region has unique challenges, several overarching issues shape the significance of the region: Natural Resources: The large reserves of oil and natural gas in the Arabian Peninsula make the security and stability of the region of vital importance to the US. Three of the world’s top 10 producers of oil are located on the peninsula – Saudi Arabia (1), the United Arab Emirates (7) and Kuwait (10).1 The size of proved oil reserves in many of these states also ensures that these countries will continue to be major players in the global oil trade so long as there is demand. According to the Central Intelligence Agency, Saudi Arabia ha the largest proven oil reserves of any country in the world, with 17% of the world total.