Rentier State

Oil is undoubtedly the most important, and at the same time, the most politico-economic commodity in today’s world. As the most important source of economic and political power, oil has constantly played a significant role for Iranian governments both before and after the revolution [1979], and has served as a major fuel for their economic power. However, historical experience in our country shows that having exuberant oil resources and revenue has had no significant link to welfare facilities or to becoming a welfare state; and the governments have always deprived the country from having a democratic state by creating certain rent-seeking networks. This article studies the effects of oil revenue in the formation of a democratic state accountable to its subjects while tries to show how huge amount of oil revenue during 2005 to 2013 halted the process of democratization in the country.

Iran and Saudi Arabia have long competed as two regional powers, striving to expand their influence and safeguard their interests over the past five decades. While this rivalry has largely been non-military and indirect, it has manifested through political, ideological, informational, and economic avenues. The pivotal variable of oil has significantly shaped the competition between these nations. In recent years, a transition towards alternative energy sources has emerged, driven by factors such as dwindling oil reserves, economic inefficiencies, oil price volatility linked to global politics, potential fluctuations in demand, supply security concerns, sustainable economic practices, and environmental issues like global warming and climate change. Both Iran and Saudi Arabia have endeavored to diversify their energy portfolios, moving beyond oil dependency through initiatives like nuclear programs and exploration of other sources. Consequently, the influence of oil on their bilateral relations has evolved, losing some of its historical significance. This study aims to explore the factors that have diminished the importance of oil in shaping the dynamic between Iran and Saudi Arabia. Through the lens of the rentier state theory and scenario-writing method, the research reveals that technological advancements, the involvement of regional and extra-regional actors in West Asia, the impact of non-governmental entities, the shift towards alternative energy sources in the region, and the economic diversification efforts of both nations have collectively reduced the once-central role of oil in their relationship.