Bahrain Mirror (Reuters): Saudi Arabia's execution of Shi'ite cleric Sheikh Nimr al-Nimr has exposed the dangerous political, religious and socio-economic fault lines which run through the kingdom and the Gulf.

News of the execution sparked some unrest among Shi'ite communities in Saudi Arabia's oil-rich Eastern Province and in neighboring Bahrain as well as in southern Iraq.

Iran's supreme leader effectively called for the overthrow of the Saudi monarchy, drawing a furious response from the Saudi government, which accused the Islamic Republic of interfering in the kingdom's internal affairs.

Iranian protesters stormed the Saudi embassy in Tehran, and Saudi Arabia responded by breaking off diplomatic relations and encouraging allied Sunni governments to do the same.

Saudi Arabia's ambassador to the United Nations told reporters on Monday "we are not natural born enemies of Iran."

But restoring diplomatic relations would only be possible if Iran were to "cease and desist from interfering in the internal affairs of other countries, including our own".

The rivalry between the two big powers in the Gulf is often simplified to a contest between a conservative Sunni monarchy and a revolutionary Shi'ite republic; the reality is more complicated and worrying.

Saudi Arabia's Eastern Province lies at the dangerous intersection of great power rivalry between Iran and Saudi Arabia, sectarian conflict between Sunni and Shi'ite, social and economic grievances, and the world's largest oil reserves.

FAULT LINES

Researchers at Columbia University have put together an outstanding collection of maps illustrating the cultural, religious, tribal and linguistic divisions across the Gulf region (here).

They show Shi'ite majority areas stretching in an arc up through Iran, across southern Iraq and down along the eastern coast of Saudi Arabia into Bahrain, with a further output in the highlands of northern Yemen (here).

Iran has taken a special interest in the Shi'ite communities in all these countries; and in some cases the government in Tehran, especially the Revolutionary Guards and other hardline elements, have tried to export their influence and encouraged unrest.

But it is also clear that many of these Shi'ite communities have strong local grievances and much of the unrest has local roots rather than simply being stirred up by Iran.

Shi'ite communities in Iraq, Bahrain and Saudi Arabia have all suffered discrimination and marginalization at the hands of Sunni-dominated governments and societies over the last century.

What adds to the destabilizing cocktail is that areas that are home to many Shi'ite communities are also where most of the region's oil and gas fields and remaining reserves are.

Southern Shi'ite-dominated Iraq contains far more oil and gas than the Sunni-majority areas in the center of the country.

And in Saudi Arabia, Eastern Province is where almost all the country's oil and gas reserves are to be found (here).

Conditions in the Eastern Province remain relatively opaque because access and reporting are controlled by the Saudi government, which also strongly discourages international discussion about political risks affecting the kingdom.

The potential for serious unrest is one of those low probability, high consequence risks that are difficult to estimate properly but which should not be ignored.

Unrest remains a tail risk rather than a central risk. It is much more likely the Eastern Province will remain peaceful, and much less likely that it will see social upheaval.

No one will make money betting on political instability in Saudi Arabia or unrest in the oilfields because the probability in any given year is low.

The risk of unrest could be as low as 5 percent or even 1 percent but that is not the same as zero. The same could have been said about the risk of upheaval in Egypt or Tunisia before 2011.

The risks are real enough that they are perceived as a serious danger by the Saudi government, which continues to maintain a heavy security presence in the area, and they help explain why the confrontation between Riyadh and Tehran is so bitter and so personal.

COMPLEX KINGDOM

In most parts of the Middle East, national boundaries do not correspond to religious, cultural, linguistic or tribal divisions, and Saudi Arabia is no exception.

The kingdom is an amalgamation of the conservative central region (Najd) with the western coast (Hijaz) and the eastern oases along the Gulf coast (al-Hasa), all of which were separately administered until comparatively recently (here).

King Abdulaziz, ruler of the Najd, conquered al-Hasa in 1913 from the disintegrating Ottoman Empire, and added the Hijaz in 1924/25, finally unifying the country in 1932. But there are still major cultural and religious differences between the regions and even within them.

Much of the ruling political and religious elite is drawn from the Najd, which is also identified with the austere Wahhabi form of Islam.

Hijaz was the home of more liberal interpretations of Islam while the majority of the population in al-Hasa followed Shi'ite forms of Islam.

As part of an effort at nation-building, conservative religious views from the Najd have been imposed on other parts of the country.

According to the U.S. government's Commission on International Religious Freedom, the modern Saudi state "privileges its own interpretation of Sunni Islam over all other interpretations" and "restricts most forms of public religious expression inconsistent with its particular interpretation of Sunni Islam".

One result is a long history of tension between Sunnis, especially those following a strict Wahhabi interpretation, and the Shi'ite communities in al-Hasa, now renamed the Eastern Province.

"Authorities continue to repress and discriminate against dissident clerics and members of the Shi'a community" the Commission on International Religious Freedom wrote in its latest annual report.

"The Shi'a community also faces discrimination in education, employment, the military, political representation, and the judiciary" the Commission concluded ("International Religious Freedom Report 2015").

The Saudi government denies any discrimination.

Recent reports have noted progress towards ending official discrimination, but how much unofficial discrimination remains is unclear because the Saudi government strongly discourages research.

As recently as 2012, the Commission found: "There are no Shi'a ministers in the government, only 5 of the 150-member Shura (Consultative Council) are Shi'a Muslims, and there are very few Shi'a Muslim leaders in high-level government positions, particularly in the security agencies."

"In predominantly Sunni Muslim areas of the country outside the Eastern Province, Shi'a and Ismaili Muslims face harassment, arrest and detention," it concluded ("International Religious Freedom Report 2012").

VIOLENT PROTESTS

Sectarian tensions between Sunnis and Shi'ites have periodically resulted in unrest in the Eastern Province - including two major labor strikes against the Arabian American Oil Company (Aramco) in 1953 and 1956, a full-scale uprising in 1979/80, and demonstrations in 2011.

The 1953 and 1956 strikes "were sparked by grievances over low wages, poor working and living conditions, and racism," according to historian Toby Jones of Rutgers University ("Desert Kingdom: How Oil and Water Forged Modern Saudi Arabia", 2010).

"From the beginning, Aramco was acutely aware of compatibility issues between Sunni and Shi'ite Muslims," the company's former chief executive Frank Jungers wrote in his memoir ("The Caravan Goes On: How Aramco and Saudi Arabia Grew Up Together" 2013).

"The Shi'ites were definitely in the minority nationally but made up the majority in the Eastern Province and tended to live in separate areas. The company was careful as a matter of policy not to allow this religious difference to become a factor in the training or evaluation of an employee," Jungers explained.

Aramco worked hard to professionalize its labor force, but the fact Jungers mentioned religious differences so prominently underscores the potential for tension.

In 1979, protests erupted in Qatif and a number of other Shi'ite areas of the Eastern Province, as well as in neighboring Bahrain, and became violent following confrontations with the security forces.

The unrest, which had a strong sectarian element, came only a few months after the shah was violently overthrown and the Islamic Revolution brought to power Ayatollah Ruhollah Khomenei in Iran.

The new government in Tehran sought to export its revolutionary ideology and openly encouraged Shi'ite communities in neighboring Iraq, Kuwait, Bahrain and Saudi Arabia to revolt against their Sunni rulers.

Khomenei's government broadcast its revolutionary message by beaming a powerful radio signal directly into the Eastern Province.

"There is little doubt that the Iranian Revolution helped galvanize politics and energize dissent among Shiites in neighboring countries," according to Jones.

"The revolution helped explain both the timing and some of the forces that encouraged Saudis to take to the streets."

In 2011, there were again violent protests in the Eastern Province and Bahrain as part of the wider Arab Spring, again mostly involving Shi'ite communities, which were put down by the security services.

Following Nimr's execution, hundreds of protesters marched through Qatif on Saturday, according to eyewitness reports.