According to reports in the Russian media, Saudi Arabia is close to inking contracts worth roughly $2 billion for military arms and technology. If the reported sales are consummated the Saudis will be purchasing 30 Mi-35 attack helicopters, up to 120 Mi-17 transport helicopters, 150 T-90S tanks, and 250 BMP-3 infantry fighting vehicles. There is also the rumor that Riyadh may be looking to tuck the advanced S-400 Triumf air-defense system into any final deal. Adding intrigue to the possible sale, the Russian-Saudi arms package may have political underpinnings masked by a Saudi intent to diversify supply sources and a Russian desire to expand into new defense markets.

The potential sale of Mi-35 and Mi-171B helicopters to the Saudis is nothing new; a Memorandum of Understanding (MoU) agree­ment was signed between Riyadh and Russia’s state arms exporter, Rosoboronexport, in mid-September 2007 regarding the possible purchase of over 150 Russian-made helicopters. At the time the MoU agreement raised eyebrows as it marked Russian penetration into the lucrative Saudi arms market, which has traditionally been the domain of the U.S. and Western European suppliers.

Perhaps more surprising, at least in French eyes, was that the Saudis had signed agreements in 2006 with Paris for up to 148 Cougar combat search-and-rescue helicopters, NH-90 naval helicopters, and  Eurocopter Fennec light helicopters. As in the case with Russia, Riyadh signed MoUs but did not sign contracts, leaving final purchase unsettled. Despite this rather important technicality, observers of the Saudi market had taken notice that suddenly a new, non-Western supplier had emerged as a competitor for lucrative Saudi contracts.

France is not the only defense producer for which the new Russian-Saudi courtship has implications. The U.S, which has traditionally been one of the Saudis leading suppliers, may also be affected by Russian inroads into the Saudi arms bazaar. From 2004 through 2007 the U.S. transferred $5.2 billion worth of armaments to Riyadh, or greater than 20 percent of its total supply.

Then there is the U.K., which closed a $9 billion deal with Riyadh for 72 Eurofighter Typhoon combat aircraft in September 2007. The deal, dubbed ‘Project Salam,’ followed an earlier, 22-year, $80 billion contract - known as ‘al-Yamamah’ - steeped in controversy. The 1985 contract, also involving British jet fighters and support services, raised questions of bribery and corruption leading the U.K. Serious Fraud Office (SFO) to open an investigation into the deal in 2004. The investigation, seen as embarrassing to the Saudi royal family and senior government officials, was abruptly halted on December 14, 2006.

Two reasons were cited for this: the first being tied to industrial pressure, the other to matters of national security. The Saudis had indeed pressed the U.K. to drop the investigation, in the process threatening to forego a Eurofighter purchase and instead pursue the French Rafale. But when the SFO investigation was frozen then-Prime Minister Tony Blair stated that it was out of concern for future British counter-terrorism efforts. The underlying message was that the Saudis had warned British officials that if the probe continued they would pull the plug on security cooperation with the British.

The use of potential arms contracts as a means of exercising political muscle could also be at play in the proposed Russian arms package. Reports in the Russian media have alleged that Riyadh is using the promise of defense sales - which in the post-Soviet era have become the lifeblood of the Russian defense industry - in order to drive a wedge between Russian-Iranian relations, gain Russian support for sanctions against Iran, and hopefully in the process sever Tehran’s crucial link to its principal arms benefactor. The Saudis view Iran as their principal regional foe, remain alarmed at Tehran’s nascent nuclear program and have ample streams of capital through which to make sizeable weapons purchases. Russia, meanwhile, is expected to see Chinese purchases of its defense products shrink and needs to find new export markets to fill this revenue gap. The purported scenario, therefore, seems a natural fit.

Wielding arms contracts as a means of leverage is a deft maneuver by Riyadh - although where the Russo-Iranian relationship is concerned the Saudis would not be the first to play this hand. The Israelis have used defense equipment as a means to influence Russian arms sales to Iran, threatening use of an electronic warfare (EW) device currently in development to neutralize the S-300 air-defense system if Moscow were to go forward with delivery of the missiles to Iran. The Israelis made a point of warning the Kremlin that any transfer of the S-300 to Iran would stand to hurt Russia more than help Tehran because once the Russian system is shown to be effectively neutralized by an Israeli electronic jammer its value on the export market would be greatly reduced.

Yet while influencing the Russian-Iranian relationship is a plausible reason for the groundwork being laid on this arms package, the Saudis may simply wish to branch out and approach multiple sellers in order to drive down prices or pry advanced platforms from supplier countries with restrictive export controls. The Saudis are also trying to acquire as much work-share and technology transfer as they can in order to continue with expansion of their fledgling defense industrial base.

Regardless of the reason for Riyadh’s pursuit of Russian military hardware, the Saudi arms market will not be drying up for the U.S. or other Western suppliers. Saudi Arabia will continue to pursue American military hardware when select platforms are approved for sale to them by the Pentagon and the U.S. Congress. To underline the point, while the potential Russian-Saudi deal includes 30 Russian attack helicopters, the Saudis also have an outstanding request for 12 new-production Boeing AH-64D Apache helicopters to go with their current fleet of 12 AH-64A models (which are being converted to AH-64D configuration).

Political intrigue aside, Saudi Arabia is simply expanding its source of supply and pitting sellers against each other while undertaking another splurge on the arms market. Altering Russian behavior towards Iran in a way favorable to Riyadh during the process would prove an added benefit. All in all, the Saudis are continuing to do what they have in the past: use their most valuable weapon - oil money - to cement their position as regional power-broker.

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