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TEHRAN (FNA)- Following Obama’s visit to Saudi Arabia, media in the West was of the opinion that Russia will now change its line in negotiations with the United States on Ukraine. Apparently, Obama was able to persuade the Saudis to help Washington ‘punish’ Russia. There was also speculation that Saudi Arabia is prepared to put larger volumes of its own oil onto the global market and bring down global prices in order to create insurmountable difficulties for the Russian budget at America’s behest.
President Obama’s visit to Riyadh, which lasted a matter of hours, will hardly be considered historic. The only major achievement to come out of the negotiations is that, despite serious disagreements in the last few months, both sides expressed willingness for reconciliation, although it is not clear on what terms. Saudi Arabia’s royal family needed a demonstration that their allied relations with America are still in place. On this issue, Obama had to concede. The handshake between the two heads of state was supposed to symbolize the end of the ‘cold war’ between the two countries. Before this, the Saudis had allowed themselves to speak with US Secretary of State John Kerry and US National Security Advisor Susan Rice in terms of ultimatums.
Some time ago, relations between Saudi Arabia and the US administration deteriorated noticeably as a result of the fact that, at the last moment, America did not launch a military operation against Syria. Then followed Saudi Arabia’s refusal to take its rotating UN Security Council seat, despite requests from the US. A little bit later, Riyadh spoke out against the nuclear agreement with Iran.
The Iranian issue became the red line beyond which there has been a clear transition from disagreement to confrontation. Factoring in the undeniable strength of Russia’s position in the Middle East, the situation threatened to bring about a fundamental change in the balance of regional forces in Tehran’s favor. All the efforts of American diplomacy to reassure the Saudis have not met with success. The Kingdom of Saudi Arabia is still insisting that the Syrian crisis be resolved through military means, and wants Washington to renounce its “bad deal” with Iran. Against such a negative background, there is no reason to believe that Obama has managed to coordinate a common anti-Russian strategy to bring down the price of oil.
Saudi Arabia is not prepared for a substantial and speedy drop in the price of its oil. You will recall that Russia’s federal budget for 2014 was calculated at a price of $101 per barrel, and its budget for 2015-2016 at $100 per barrel. Saudi Arabia has to balance its budget with oil prices of nearly $90 per barrel, but it set a record budget for 2014 of $228 billion, expecting to receive an additional $10-12 billion from oil exports. Supporting America’s proposal to lower prices would mean that the Saudis would have to bring down their budget. Riyadh cannot see any reason why it should punish itself, and it is unlikely that the country will do it. Ukraine means nothing to the monarchy in comparison with Syria and Iran, while its friendship with America is perhaps only of benefit to the Saudis if it is directed against these countries.
An energy war is brewing between Tehran and Riyadh, incidentally, which has nothing at all to do with Russia, but has been predicted ahead of the removal of the oil embargo imposed against Iran by America and the EU. Predictions sometimes reach the point of absurdity. Apparently, it could even be profitable for Iran to sell its ‘black gold’ at a price of $50 per barrel. Iran, however, has no such plans. In keeping with statements by the heads of the Iranian oil industry, Iran is planning on increasing its oil production to 4 million barrels per day and, at the very least, regain its share of the global oil market after the agreement on Iran’s nuclear program was signed in Geneva in November 2013, the volume of Iranian oil being bought by traditional buyers has been increasing gradually. Despite the US and EU sanctions that are still in place, Asian countries, including China, India, Japan and South Korea, are already getting ready to sign major contracts with Iran which will provide for an increase in their imports of Iranian oil.
Rather than Russia, Iran’s return to its energy markets will have a direct effect on Saudi Arabia, which the US used as a strikebreaker, forcing Iranian oil to be replaced in a number of countries despite decisions by OPEC. The Kingdom of Saudi Arabia grabbed most of Iran’s share, and now Tehran is intending to put the issue of a return to the usual order of business before OPEC. Moreover, Iran is not expressing any desire to relinquish its own plans to increase its oil production. Riyadh will have to agree to Iran’s demands and reduce its own production by at least a third. This will have a profound impact on the replenishment of Saudi Arabia’s budget even at current prices, while agreeing to bring down prices at America’s behest would be economic suicide for Riyadh. In the current situation, it would be more beneficial for Saudi Arabia to hinder the withdrawal of the oil embargo against Iran, and then try to disrupt the successful conclusion of the talks on Iran’s nuclear program.
Riyadh sees Obama’s policy of normalizing relations with Tehran as the start of a new phase by the White House to transform the geopolitical structure of the Middle East. The Saudi monarchy is not comfortable with the fact that Iran could become a military and economic superpower in the region in the foreseeable future, a superpower that Saudi Arabia would have to contend with when addressing the Arab world’s most acute problems. The Kingdom of Saudi Arabia responded to Iran’s success at settling its nuclear issue with a direct challenge. Riyadh resorted to blackmail by threatening to receive nuclear weapons from Pakistan. While the six-nation group mandated by the UN Security Council is negotiating guarantees from Iran that it will not develop weapons of mass destruction, the Saudis are reverting to their own nuclear plans. Riyadh’s plans include the construction of 16 commercial nuclear reactors by 2030 and its mastering of the full uranium enrichment cycle. The necessary technologies can be purchased in Pakistan.
The story of Riyadh’s nuclear cooperation with Islamabad, including the acquisition of missiles capable of delivering nuclear warheads over long ranges, goes back decades. This has been discussed by Gary Samore in particular, who until March 2013 was the White House Coordinator for Arms Control and Weapons of Mass Destruction. He wanted to understand (since it is still unclear) why the US is not objecting to Saudi Arabia’s nuclear plans, seeing as there is a risk of the rivalry between Iran and Saudi Arabia turning into a global conflict… It seems that America’s unyielding ally does not want to accept the fact that international guarantees regarding the peaceful nature of Iran’s nuclear program and the destruction of Syria’s chemical weapons will be of enormous benefit to the whole of the Middle East.
Obama did not manage to dot all the Is during his visit to Riyadh, and the illusion of some kind of similarity between these two countries’ strategic interests was dispelled during the visit once and for all. The Saudis reproach Obama for treating his allies like a dishcloth that is used and then thrown away. Like the Israeli leaders, in fact, the Saudis are worried that as soon as Washington and Tehran sign the ‘agreement of the century’, the US will leave the region, allowing Iran to widen its influence there. In response, Obama is promising the Saudi rulers that he will enter into a strict agreement with Iran, provide the Syrian rebels with everything they need, and not rule out a military strike in the future with the aim of destroying Syria as a state. Nothing has changed about America’s strategy, except that Washington has now also started to manipulate the monarchies of the Persian Gulf.
By Nikolai Bobkin
This commentary was first released by 'Strategic Culture Foundation' on April 03, 2014.
TEHRAN (FNA)- Following Obama’s visit to Saudi Arabia, media in the West was of the opinion that Russia will now change its line in negotiations with the United States on Ukraine. Apparently, Obama was able to persuade the Saudis to help Washington ‘punish’ Russia. There was also speculation that Saudi Arabia is prepared to put larger volumes of its own oil onto the global market and bring down global prices in order to create insurmountable difficulties for the Russian budget at America’s behest.
President Obama’s visit to Riyadh, which lasted a matter of hours, will hardly be considered historic. The only major achievement to come out of the negotiations is that, despite serious disagreements in the last few months, both sides expressed willingness for reconciliation, although it is not clear on what terms. Saudi Arabia’s royal family needed a demonstration that their allied relations with America are still in place. On this issue, Obama had to concede. The handshake between the two heads of state was supposed to symbolize the end of the ‘cold war’ between the two countries. Before this, the Saudis had allowed themselves to speak with US Secretary of State John Kerry and US National Security Advisor Susan Rice in terms of ultimatums.
Some time ago, relations between Saudi Arabia and the US administration deteriorated noticeably as a result of the fact that, at the last moment, America did not launch a military operation against Syria. Then followed Saudi Arabia’s refusal to take its rotating UN Security Council seat, despite requests from the US. A little bit later, Riyadh spoke out against the nuclear agreement with Iran.
The Iranian issue became the red line beyond which there has been a clear transition from disagreement to confrontation. Factoring in the undeniable strength of Russia’s position in the Middle East, the situation threatened to bring about a fundamental change in the balance of regional forces in Tehran’s favor. All the efforts of American diplomacy to reassure the Saudis have not met with success. The Kingdom of Saudi Arabia is still insisting that the Syrian crisis be resolved through military means, and wants Washington to renounce its “bad deal” with Iran. Against such a negative background, there is no reason to believe that Obama has managed to coordinate a common anti-Russian strategy to bring down the price of oil.
Saudi Arabia is not prepared for a substantial and speedy drop in the price of its oil. You will recall that Russia’s federal budget for 2014 was calculated at a price of $101 per barrel, and its budget for 2015-2016 at $100 per barrel. Saudi Arabia has to balance its budget with oil prices of nearly $90 per barrel, but it set a record budget for 2014 of $228 billion, expecting to receive an additional $10-12 billion from oil exports. Supporting America’s proposal to lower prices would mean that the Saudis would have to bring down their budget. Riyadh cannot see any reason why it should punish itself, and it is unlikely that the country will do it. Ukraine means nothing to the monarchy in comparison with Syria and Iran, while its friendship with America is perhaps only of benefit to the Saudis if it is directed against these countries.
An energy war is brewing between Tehran and Riyadh, incidentally, which has nothing at all to do with Russia, but has been predicted ahead of the removal of the oil embargo imposed against Iran by America and the EU. Predictions sometimes reach the point of absurdity. Apparently, it could even be profitable for Iran to sell its ‘black gold’ at a price of $50 per barrel. Iran, however, has no such plans. In keeping with statements by the heads of the Iranian oil industry, Iran is planning on increasing its oil production to 4 million barrels per day and, at the very least, regain its share of the global oil market after the agreement on Iran’s nuclear program was signed in Geneva in November 2013, the volume of Iranian oil being bought by traditional buyers has been increasing gradually. Despite the US and EU sanctions that are still in place, Asian countries, including China, India, Japan and South Korea, are already getting ready to sign major contracts with Iran which will provide for an increase in their imports of Iranian oil.
Rather than Russia, Iran’s return to its energy markets will have a direct effect on Saudi Arabia, which the US used as a strikebreaker, forcing Iranian oil to be replaced in a number of countries despite decisions by OPEC. The Kingdom of Saudi Arabia grabbed most of Iran’s share, and now Tehran is intending to put the issue of a return to the usual order of business before OPEC. Moreover, Iran is not expressing any desire to relinquish its own plans to increase its oil production. Riyadh will have to agree to Iran’s demands and reduce its own production by at least a third. This will have a profound impact on the replenishment of Saudi Arabia’s budget even at current prices, while agreeing to bring down prices at America’s behest would be economic suicide for Riyadh. In the current situation, it would be more beneficial for Saudi Arabia to hinder the withdrawal of the oil embargo against Iran, and then try to disrupt the successful conclusion of the talks on Iran’s nuclear program.
Riyadh sees Obama’s policy of normalizing relations with Tehran as the start of a new phase by the White House to transform the geopolitical structure of the Middle East. The Saudi monarchy is not comfortable with the fact that Iran could become a military and economic superpower in the region in the foreseeable future, a superpower that Saudi Arabia would have to contend with when addressing the Arab world’s most acute problems. The Kingdom of Saudi Arabia responded to Iran’s success at settling its nuclear issue with a direct challenge. Riyadh resorted to blackmail by threatening to receive nuclear weapons from Pakistan. While the six-nation group mandated by the UN Security Council is negotiating guarantees from Iran that it will not develop weapons of mass destruction, the Saudis are reverting to their own nuclear plans. Riyadh’s plans include the construction of 16 commercial nuclear reactors by 2030 and its mastering of the full uranium enrichment cycle. The necessary technologies can be purchased in Pakistan.
The story of Riyadh’s nuclear cooperation with Islamabad, including the acquisition of missiles capable of delivering nuclear warheads over long ranges, goes back decades. This has been discussed by Gary Samore in particular, who until March 2013 was the White House Coordinator for Arms Control and Weapons of Mass Destruction. He wanted to understand (since it is still unclear) why the US is not objecting to Saudi Arabia’s nuclear plans, seeing as there is a risk of the rivalry between Iran and Saudi Arabia turning into a global conflict… It seems that America’s unyielding ally does not want to accept the fact that international guarantees regarding the peaceful nature of Iran’s nuclear program and the destruction of Syria’s chemical weapons will be of enormous benefit to the whole of the Middle East.
Obama did not manage to dot all the Is during his visit to Riyadh, and the illusion of some kind of similarity between these two countries’ strategic interests was dispelled during the visit once and for all. The Saudis reproach Obama for treating his allies like a dishcloth that is used and then thrown away. Like the Israeli leaders, in fact, the Saudis are worried that as soon as Washington and Tehran sign the ‘agreement of the century’, the US will leave the region, allowing Iran to widen its influence there. In response, Obama is promising the Saudi rulers that he will enter into a strict agreement with Iran, provide the Syrian rebels with everything they need, and not rule out a military strike in the future with the aim of destroying Syria as a state. Nothing has changed about America’s strategy, except that Washington has now also started to manipulate the monarchies of the Persian Gulf.
By Nikolai Bobkin
This commentary was first released by 'Strategic Culture Foundation' on April 03, 2014.
