Salman Aldossary/Saudi Arabia will not save Iran’s economy

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Saudi Arabia will not save Iran’s economy
Salman Aldossary/Asharq Al Awsat
Monday, 5 Jan, 2015

Who would have believed it? Iran needs a savior, but seeks help not from its main strategic ally Russia, nor from its friend and partner Iraq, nor from Venezuela, Turkey, or even Oman or Qatar; no, from its old rival, Saudi Arabia. Speaking to Reuters last week, Iranian Deputy Foreign Minister Hossein Amir Abdollahian asked the Kingdom to intervene to stop oil prices from tumbling further, or else countries in the Middle East will face serious harm.

What could have possibly happened to make Tehran make such a dramatic U-turn? It is true that falling oil prices have had a drastic effect on Iran’s already troubled economy; it is true also that domestic events may have given a new flavor to some recent political decisions; it is true also that some of the Iranian administration’s foreign adventures, especially in Syria, have bled state coffers dry. But one would never have expected that the answer to all these economic problems lay in Riyadh. One could even have believed it if someone predicted the Iranians would seek help from their old foe, the Great Satan, Washington (as, by the way, it has done before and continues to do), or Russia, its main partner in defending the Assad regime in Syria—but Saudi Arabia? Not even Tehran’s closest friends saw that one coming. We duly thank Saudi Arabia’s oil for this surprise.

One sometimes wonders about the fact that some politicians excel at economics and only dabble in politics, while others stick to their day-job and only rarely play the economics game. Tehran insists on holding fast to its view of Riyadh’s role in the oil markets—one akin to a conspiracy theory—which sees the Kingdom seeking to do anything to bring fellow oil-producer Iran to its knees. When asked about this recently by a reporter from the BBC, I could only reply by saying: “With all due respect to those who believe in the conspiracy theories, I must say they either do not see the economic facts, or they pretend not to, so they can lay the blame at Saudi Arabia.” The simple truth here is that Saudi Arabia requested oil producers outside OPEC to lower production, on the basis that OPEC countries would follow suit and everyone would therefore be in the same boat, but Russia refused outright. Iran then turned its sights toward Riyadh. But why would the Kingdom lower its production and risk losing its slice of a market where it only holds a 9-percent share—one, which Riyadh knows from past experience, is difficult to retain once it has been lost? And all to save Iran from the effects of falling oil prices? And why only Saudi Arabia? Why did Iran not ask Russia? What kind of strange logic is this?

The Iranians, and others, need perhaps to be reminded of some facts. Back in 2012 when the United States and the European Union imposed sanctions on the sale of Iranian oil—and the market was characterized by high demand, and not a supply surplus as is the case now—Western countries requested Riyadh raise its production levels in order to make up the shortfall in supply that would result from the ban on Iranian oil sales. However, the Kingdom refused, and decided to let market forces do their work and restore the balance to the market, even though it could have used this opportunity to sneak a quick shot at Tehran and settle a few old scores. But Saudi Arabia has always insisted on keeping policies relating to oil—which is, after all, a highly sensitive economic commodity—away from political considerations.

Iran continually boasts about exporting its revolution abroad. Its disgraceful meddling in Bahrain, its inhumane involvement in Syria, its inflaming of sectarian divisions in Iraq and Yemen—not to mention Lebanon and even Saudi Arabia, where it also pokes its nose—are but a few examples of this. There are even those who marvel at Tehran’s strategic nous and how it supposedly has the Gulf countries and Saudi Arabia in a tight corner. And yet here it is, in a daze, after taking a slap to the face it just did not see coming. The only clear truth in front of us here is that Iran’s economy is seriously tanking, and now it wants Saudi Arabia to save it. As for the Kingdom, it will do nothing except watch.