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Arabia is in turmoil. Nominally under control of the United States military, in reality, warlords and clerics are in control of the vast majority of populated areas. In general, the U.S. is focusing its forces on controlling the area around and leading from the Ghawar Oil Field to ports where U.S. tankers can fill up. After the house of Saud fell, there has been non-stop death. It is said that aside from Sudan, DR Congo, and Iraq, Arabia is the most violent place on earth.
Saudi Arabia struck it rich in the late 1940s when massive amounts of oil were found. Deals were made with the United States in particular, in which the U.S. would protect the Saudis in exchange for a non-stop supply of oil. Things turned sour when Saudi Arabia nationalized all exploitation of its oil fields under the company name Saudi Aramco. However, the United States and Saudi Arabia continued to have a warm relationship at the highest levels (even if there was a lot of hate and suspicion at the lower levels) until the oil peak. Over the years, the Arabians became wealthy, owing to their great profits, but civil rights never improved past the "women can't drive cars" and "weekly public execution" phase.
Post-peak, all hell broke loose. Though production had peaked in 1996 - the same year as the world-wide peak - Saudi Arabia was still the second-largest supplier of oil to the United States after Canada. In 2003, the United States attacked Iraq, after already toppling the Taliban in Afghanistan in 2001. As the situation worsened in Iraq, and as it seemed that the Shi'ites would finally wield control of the nation, a terrorist group in Saudi Arabia called simply "Allahu Akbar" or "God is Great" set up a complex network of bombs that succeeded in killing King Fahd, Crown Prince Abdullah, and several other high-ranking members of the Saudi royal family. During the chaos, there started a popular uprising which led to a coup (usurping the house of Saud) and the establishment of the Islamic Republic of Arabia. In truth, it was not a republic, but wholly based on Shariah law, which was applied even more harshly than in the Arabia of the Sauds. The oil shipments were cut off, as a major reason for the uprising was that the Saudi royal family was too friendly with the United States. If the U.S. oil supply could be shut off from such a big exporter, it would would cripple "The Devil's Empire". Of course, the United States responded by invading and trying to restore the Saudi royal family, and more importantly, the oil shipments. Oil shipments (though now naturally decreasing yearly) again reach the U.S., but terrorist attacks targeting the pipelines and infrastructure are a common occurrence.