The Oil Confrontation: Iran Wants To Harness Its Oil To Boost Its Military And Political Ambitions


02 Feb 2012

By Abdul Rahman Al-Rashid

I think that the Iranian government is disappointed that oil prices have not soared as a result of the successive sanctions imposed by the US and Europe against it.

Iran, an OPEC member, was hoping for an upsurge in oil prices that could force its rivals to retract their boycott, especially in an already nervous market given the interruptions in the Libyan crude oil supply ever since last year, which is still producing less than its quota during the days of Gaddafi. However, Iran has been left disappointed, and so it repeated its usual statements. It made public threats to close the Strait of Hormuz, the main passageway for a quarter of the world's oil exports, but prices did not go up. Iran publicly warned Saudi Arabia - the world's largest crude oil exporter - against attempting to compensate for any expected shortfall in oil availability, after the world stops buying Iranian produce, yet such warnings did not raise the oil prices. Moreover, according to my sources, Iranian authorities even dared to send their boats, with men armed with machine guns on board, to waters in close proximity to Saudi oil-producing regions; but still prices did not go up.

I believe that even if Iran committed a foolish military act, going beyond its warnings and provocations; there would still be sufficient oil-production capabilities to meet the market demands. Even if Tehran closed the Strait of Hormuz, the majority of Saudi oil could be transported and exported via pipelines to the Red Sea, and Emirati oil could pass through the Arabian Sea. Even if prices went up, this would only be a short-lived, temporary outcome, given the oil-producing states additional capabilities.

Iran has no right to be angry with other oil producers making up for any shortfall. OPEC - with Iran included among its member states - stipulates total production quotas, and any member can fill a gap when one appears.

The Saudi cabinet was right - despite angering Iran - when it outlined its stance two weeks ago and stated that boycotting oil imports from any source is a domestic affair that concerns each country separately. In other words, if the Europeans decide to boycott Iranian oil, then it is up to them and it is their right to seek alternatives from Algeria or the UAE for example. We should not forget that oil-exporting countries would face numerous risks as a result of artificially increased oil prices, along the lines of what Tehran is trying to do today. Raising oil prices would primarily affect poorer countries, but even giant economies such as India and China, which are not directly part of the dispute, have hastened to seek assurances from the Gulf States, regarding their oil supply. This is exactly what the Saudi cabinet sought to address when it stated that Saudi Arabia was only interested in "the stability of the international oil market, with regards to supply and demand or in terms of prices."

A war of words may be taking place, but there is certainly no conspiracy against Iran on the part of the Gulf States, with the aim of imposing a blockade on Tehran. However, Iran is attempting to drag the oil-producing countries, especially the Gulf States, into its planned game to disrupt the international market. Yet the Gulf States will not allow this, regardless of whether Iran issues official warnings or sends its warships to the Gulf shores. Iran should solve its own problems and bear all the consequences of its decisions.

Tehran has decided to escalate the confrontation over its nuclear program, but the Western powers have decided to confront Iran economically and not through military action. Why would Saudi Arabia or the rest of the OPEC member states for that matter, choose to support Iran at the expense of their economies? Over the past three decades, Iran has dedicated its entire wealth to one project, namely the quest for military superiority. On the contrary, the six Arab countries currently in confrontation with Tehran, namely the GCC states, have chosen to spend their money on economic development. What we see today is merely the natural outcome of such a state of affairs. Iran wants to harness its oil to boost its military and political ambitions, whilst on the other hand; the Gulf Arabs are selling their crude oil, related extracts and petrochemicals for social and industrial development.

As was the case with Saddam Hussein's Iraq, Iran has better natural and human resources than the Gulf States, yet it has chosen to follow the same path as failed states such as Cuba, North Korea, al-Assad's Syria and Gaddafi's Libya. These countries all share the same notion; namely their quest for power and foreign confrontations.

 

Al Rashed is the general manager of Al -Arabiya television. He is also the former editor-in-chief of Asharq Al- Awsat, and the leading Arabic weekly magazine, Al Majalla. He is also a senior Columnist in the daily newspapers of Al Madina and Al Bilad. He is a US post-graduate degree in mass communications. He has been a guest on many TV current affairs programs. He is currently based in Dubai.

 

  EsinIslam.Com

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