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Riyadh-Tehran conflict can cause growth in oil prices

Riyadh-Tehran conflict can cause growth in oil prices

Total and CNPC set to sign Iranian gas deal (08 November 2016 11:46)

Date: 5 January 2016 19:52

Baku, Azerbaijan, Jan. 5

By Anakhanum Hidayatova – Trend:

The conflict between Saudi Arabia and Iran is aggravating an existing conflict in the Middle East, said Svante Cornell, a Swedish scholar, director and co-founder of the Institute for Security and Development Policy, and the research director of the Central Asia-Caucasus Institute & Silk Road Studies Program.

“I think it [the conflict] deepens a cycle of sectarian escalation,” said Cornell. “I think it will escalate and aggravate that situation.”

Speaking about the possibilities of change in oil prices on the backdrop of the Saudi Arabia-Iran conflict, Cornell said it is not clear whether the conflict is going to immediately affect the oil prices, but it can potentially help to increase them.

Iran produces 2.8 million barrels of oil per day and exports 1.1 million barrels per day of this volume.

Saudi Arabia produces over 10 million barrels of oil per day and exports more than seven million barrels a day.

Relations between Saudi Arabia and Iran soured after execution of Nimr al-Nimr, a prominent Shia cleric, by the Kingdom along with other 46 people, which was followed by a strong protest from Iran.

Mass protests took place in Iran following the said execution. In particular, the Saudi embassy in the capital Tehran and the consulate in the city of Mashhad were attacked, after which Riyadh broke off diplomatic ties with Tehran on Jan. 3.

Saudi Arabia’s permanent representative to the United Nations Abdullah al-Moallem had earlier said that relations with Iran will be restored only when Tehran stops “interfering in the internal affairs of other countries, including that of Saudi Arabia’s”.

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