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Saudi Arabia-Iran tension not to trigger new oil price war

Saudi Arabia-Iran tension not to trigger new oil price war

OPEC reaches a deal to cut production (02 December 2016 17:46)

Date: 5 January 2016 20:37

Baku, Azerbaijan, Jan. 5

By Umid Niayesh - Trend:

Saudi Arabia is unlikely to enter a new oil price war with Iran as the casualty might be its own economy, said Hassan Hashemian, an Iranian expert on Arab affairs.

“It is unlikely that Saudi Arabia will play the oil card to impose pressure on Iran by supplying more oil to market to impact the price more, at a time it is already suffering a deficit in budget,” Hashemian told Trend Jan. 5.

“No more oil price war is expected between the two countries,” he added.

Saudi Arabia’s 2016 budget is facing a record annual deficit of nearly $98 billion as a result of plunging oil prices.

Hashemian further said that the Iranian side now tries to calm down and decrease the tension between Tehran and Riyadh.

Following the execution of a prominent Shia cleric, Nimr al-Nimr by Saudi Arabia some Iranian protesters stormed Saudi embassy in Tehran on Jan. 3, smashing furniture and setting the building on fire. Saudi Arabia broke off diplomatic ties with Iran on Jan. 3 after the attack.

Bahrain, Sudan, Kuwait and the UAE have also rallied to Saudi Arabia's side, breaking off or downgrading relations with Iran in recent days.

“What had happened lately has been within Riyadh’s policy and in line with its interests as an Arabic-Islamic solidarity was formed around the Saudi Arabia,” said Hashemian.

He added that the recent statements made by Iranian officials including condemning the attack on the Saudi embassy and linking it to “infiltrators” indicates that Tehran is determined to not permit the crisis go deeper.

The expert also noted that Iran’s Supreme Leader Ayatollah Ali Khamenei in his second speech after the start of the crisis preferred to not return to the issue, whereas in his first speech he condemned the execution, saying “divine vengeance will afflict Saudi politicians.”

A few countries have expressed readiness for mediation between Tehran and Riyadh, and the tension seems to not escalate from the current level, said Hashemian.

He also touched upon some hypothesis that say Saudi Arabia deliberately provoked conflict with Iran with execution of al-Nimr to show the “aggressive face” of Iran to the world following the historic nuclear deal, at a time when the Islamic Republic is trying to re-emerge on the global economic arena with the lifting of sanctions.

“If it is true it will indicate that the Saudi Arabia runs very smart policy, accurately reading Iran’s reaction,” Hashemian said.

The execution of al-Nimr was criticized by West and human right activists, but Saudis used Iran’s aggressive reaction in attacking the diplomatic centers as an advantage, he explained.

“It means that Saudi Arabia trapped Iran via forecasting Tehran’s reaction,” added the expert.

“There is another hypothesis, which says the execution of al-Nimr was a message to Iran after Jaysh al Islam chief, Zahran Alloush, who is close to Riyadh, was killed in Syria in an air strike by Russia, which is Iran’s ally,” noted Hashemian.

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