Saudi Arabia may become what the Vatican City is for the Christians, while the leadership of the Islamic world could shift away to non-Arab countries like Malaysia, Turkey and Indonesia
During the days of Arab spring, Abdelaziz Bouteflika of Algeria had a comfortable time ruling in comparison to his neighbouring Arab monarchs and dictators. He survived the Arab shakeup in 2011 and 2012.
But the country's oil-based economy continued to fail. When the income per person of the Algerians dropped to $4,000, what once stood at $5,600 in 2012, Bouteflika knew he could no longer afford to buy the public's loyalty.
Bouteflika resigned in April 2019. But the country's economy continues to somersault, and civil unrest grows.
Now, the ruling regime of Algeria needs the oil price to go up to $157 a barrel to balance its books. But the price remains somewhere around $40 per barrel.
In hunger-stricken Lebanon, protests have already resumed in defiance of the risks of coronavirus pandemic. The Middle Eastern country is probably an ideal example of what the Arab countries would look like when the world is no more in need of oil.
At present, while Lebanon wishes it had oil, Algeria begs for a rise in oil prices. But oil can apparently no longer save the Middle East.
Instead, the abundant sources of cleaner energy with increasing competitiveness only mean that oil is going to remain cheap.
Fossil fuels are gradually becoming the relics of the past. Many countries around the world are now rallying for climate-friendly green energies instead of oil and other hydrocarbon deposits.
"A revolution is taking place in renewable energy" – this is how BBC journalist James Landale narrated the progress of alternative energy and power when he recently talked about Gemasolar – a solar power plant in southern Spain – that can continuously supply power for 24 hours a day.
From solar power to electric cars and passenger aircraft, demand for alternatives to oil and other hydrocarbon deposits are rising. Energy experts have long been foretelling that with the rise of alternative energies, we will soon enter the post-oil world.
On top of that, the pandemic further damaged an already struggling oil market and the oil price hit an all-time low in the recent days.
The situation resonates with Shell Oil predictions that global oil demand will peak and fall away as early as 2025. Energy experts, according to The Economist, believe that the recent turmoil in the oil market is here to stay. It is "not an aberration".
Against this backdrop, the Middle Eastern economies based on hydrocarbon deposits - especially the geopolitically influential gulf countries - are in trouble.
Low-price oil leaves bitter choices
These Middle Eastern countries are in trouble because petrodollars – their key weapon of influence – are about to dry up. In the changing spectrum of the global demand for oil, the budget of the Arab oil-producing countries, except for Qatar, does not add up anymore.
According to a latest report of The Economist, Oman needs oil price to rise to $87 per barrel, while according to the IMF, Saudi Arabia requires the price to be $82 per barrel to balance its budget.
Kuwait's deficit could hit 40 percent of its GDP. While its debt is listed as junk by the credit rating agencies, Oman is now struggling to borrow.
But the oil price is not expected to rise anywhere near what they need in the foreseeable future. Consequently, from slicing government spending to axing government salaries, many Arab counties are now left with bitter choices.
Saudi Arabia recently tripled sales taxes and suspended cost-of-living allowance for state workers. Despite this, the country's budget deficit could exceed $110 billion this year, which is almost 16 percent of its GDP.
Crisis spiralling out like an avalanche
Many of the Middle Eastern countries, including Saudi Arabia, have been preparing to avoid the disaster that the transition to the post-oil world could pose.
In 2016, Saudi Crown Prince Mohammed Bin Salman formed Vision 2030, a strategic framework, to reduce the country's dependency on oil and diversify its economy. But four years down the road, roughly 80 percent of Saudi Arabia's revenues still depend on crude. The IMF already warned that the reformation process is going on slowly.
Furthermore, with oil losing global relevance rapidly, "2030 has become 2020," a consultant to Prince Muhammad told The Economist.
The oil revenues of the Middle East and North Africa, according to the IMF, fell from over $1 trillion in 2012 to $575 billion in 2019. This year, the Arab countries will earn only $300 billion from oil revenues.
For the Middle East, post-oil world means multifaceted geopolitical repercussions
Lesser oil money for the Arab countries, however, does not only mean a weaker economy. Most of the Middle Eastern countries' existence is so much intertwined with petrodollars that absence or lack of it has deeper geopolitical repercussions than it would have on other oil producers like Russia and the US.
For Arab monarchs and dictators, oil brings public loyalty and unquestionable obedience to their militaries. Minus oil, it means government subsidy from Arab life disappears and people rising for their long-lost democratic rights. And the biggest nightmare of all, the militaries no longer unconditionally support the regimes.
Bouteflika of Algeria perhaps set an example of what a weak economy could do to these powerful regimes, and Lebanon set an example of how these mighty monarchs could suffer if the reformations in preparation for the post-oil world does not work out according to expectation.
The pain, however, will also be felt in non-oil producers of the Middle East too, who earn remittances worth as much as 10 percent of their GDP from their oily neighbours.
More than 2.5 million Egyptians – equivalent to three percent of the country's population – work in oil-rich Arab countries as migrant workers. Similarly, countries like Jordan, Lebanon, and the Palestinian territories largely depend on their oily neighbours as the lifeline of their economy.
The turmoil of the world beyond oil may establish democratic rights in some parts of the Arab world, but the region may get back its original significance as only a religious hub instead of its geopolitical significance driven by its petro-muscles.
Saudi Arabia may become what the Vatican City is for the Christians, while the leadership of the Islamic world could shift away to non-Arab countries like Malaysia, Tukey and Indonesia.
People in the Arab world may seek more individual rights while pan-Islamism or pan-Arabism could revive in some parts. But Wahhabism, a strict interpretation of Islam sponsored by Saudi monarchs, may find hard days. Lesser oil money for Saudi Arabia means its missionary influence would be shrinking globally.
At the same time, other rival schools of thought may take roots in the Arab world since Wahhabism has always been challenged, until the Saudi monarch invested its petrodollars in spreading Wahhabi ideology globally.
Saudi Prince Salman has perhaps been easing some of the strict rules of the conservative kingdom as preparation for that future beyond oil.
But only time will have the final say on whether the future without oil keeps these regimes intact in exchange for individual rights, or stronger civil rights movements for democracy change the Arab monarchies en masse.
How the world beyond oil changes the Arab world is a matter of debate, and political analysts may struggle to find a common ground on what happens to whom. However, most would agree that when the Middle East loses its petrodollars, it would indeed be felt dearly all across the world.