Oil prices can rise in case of Saudi Arabia-Iran hot conflict

Oil prices can rise in case of Saudi Arabia-Iran hot conflict
20:32 6 Yanvar 2016
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Baku, Azerbaijan, Jan. 6

By Anakhanum Khidayatova – Trend:

Supplies continue to exceed demands on the world hydrocarbon market, Valentyn Zemlyansky, the director of energy programs at the Center of World Economy and International Relations of Ukraine’s National Academy of Sciences, told Trend Jan. 6.

“The oil price growth is not expected in the short term,” he said.

The expert said that the oil price can increase on the world market if Saudi Arabia-Iran conflict deteriorates.

He did not rule out the possibility that Riyadh-Tehran conflict can turn into a military confrontation.

"The world economy is in a serious crisis,” he said. “This is the first sign of a possible big conflict."

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

Saudi Arabia produces more than 10 million barrels of oil daily and exports more than seven million barrels per 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 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 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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