How the Saudis Plan to Put Oil Squeeze on Iran

[Marie26]

Saudi Arabia aims to thwart Tehran by keeping oil prices low,
writes Anatole Kaletsky

The Australian, Australia January 29, 2007

... The third strand of Washington's Iranian policy is less visible, but may well turn out to be more important. The idea is to thwart Iran's threatened hegemony with an economic pincer movement consisting of financial diplomacy on one side and energy policy on the other. The main responsibility for this strand of policy rests not with the US or Israel but with the third member of the unlikely new anti-Iranian alliance: Saudi Arabia.

This brings us to the final and most interesting strand in the anti-Iranian policy nexus: the price of oil. Iran's economy depends entirely on oil sales, which account for 90 per cent of exports and a roughly equal share of Tehran's budget. Since July, a barrel of oil has fallen from $US78 to just over $US50, reducing Tehran's revenues by about a third. If the oil price fell into the $US35 to $US40 range, Iran would shift into deficit, and with access to foreign borrowing cut off by UN sanctions, the Government's capacity to continue financing foreign proxies would quickly run out.

Iran has reacted to this threat by calling on OPEC to stabilise oil prices, but in practice only one country has the clout to do this: Saudi Arabia. In a significant statement this month, Saudi Oil Minister Ali al-Naimi opposed Iranian calls for production cuts to halt the decline in oil prices. Naimi's pronouncement was cast as a technical matter unconnected with politics, but it seemed to confirm private warnings by King Abdullah that his country would try everything to thwart Iran's hegemony in Iraq and the region, whether by military intervention or more subtle economic means.

This policy was spelt out with surprising precision by senior Saudi security adviser Nawaf Obaid in an article in The Washington Post: "King Abdullah may decide to strangle Iranian funding of the Iraqi militias through oil policy. If Saudi Arabia boosted production and cut the price of oil in half, the kingdom could still finance its current spending. But it would be devastating to Iran, which is facing economic difficulties even with today's high prices."

http://www.theaustralian.news.com.au/story/0,20867,21131719-601,00.html

[Demeter]

1. Then the Saudis Are Going To Have to SIT on Dumbya

because as sure as the sun rises in the Middle East, he'll fuck it up.

[Ezlivin]

2. "If Saudi Arabia boosted production..."

According to Matthew Simmons they will not be able to boost production by any significant amount.

[Peace Patriot]

3. That's if you believe, a) that there is any significant presence of Iran in Iraq;

or b) that, if there is an Iran presence in Iraq--big or small--it's a bad thing. There is no country with more of an interest in a stable Iraq, than Iran. If Iran is officially sponsoring agents in Iraq (--and it's not just rogue jihadists or whatever), then I would suspect that it is trying to bring about a truce between the Sunnis and the Shias, or engaging in other efforts at stability. If Mexico, for instance, were invaded by China, after Mexico's oil, wouldn't the U.S. have a vital interest in that and even be justified to send operatives into Mexico, to help the Mexicans expel the invaders and return the country to normalcy? The U.S. might--and has--stirred up class war in Mexico (war of the rich on the poor)--and are doing so right now--but full scale instability or foreign invasion? We wouldn't want that on our border. Same with Iran. They may side with the Shias, or have their own designs as to dominating Iraq and the Middle East, but, right now, a huge country on their border is in total crisis--with masses of refugees, failing infrastructure, open warfare between tribes, the inability of anybody to stop the sectarian violence, a puppet Iraqi government confined to the U.S. "Green Zone," 15 permanent foreign military bases which everybody hates, etc., etc. This is an intolerable security problem for Iran. (--just read a news report that Iran has closed its borders, as a matter of fact). And unlike the nutballs in the Bush Junta, I don't think Iran has such a bad government, or particularly ill intentions. I think they are shit-scared, and a lot of their behavior is based on fear. They have one politician who has shouted "Death to Israel," but his influence is in decline. I think Iran is actually a fairly civilized country--far, far superior to the Saudis or other M-E fat cat sultans, in spreading the oil wealth around, and in permitting democratic institutions--and really doesn't want this chaos next door. I may be wrong. I'm not on-the-ground in the Middle East, and it's hard to read between the lines of the very biased reports that we get. But I think this is a fairly reasonable assessment.

Ergo: What the fuck the Bush Junta and their Saudi Arabian cronies may be up to, in trying to squeeze Iran, is anybody's guess. But it wouldn't surprise me if it had nothing to do with any fancied contribution of Iran to Iraq chaos, but, rather, an intention to destabilize Iran, as well. Iran is a republic. Saudi Arabia is a monarchy. Which do the Bushites support? The monarchy, of course--and a more corrupt one there couldn't be. Iran has the mullahs and religious rule, but it's still a republic. It has no fat cat sultans. No kings. No royalty. No excessively rich people. It has some democratic institutions. And it has a young population eager to join the modern world. Again, who do the Bushites side with? The old fat cat monarchs and their absolute rule. And they are up to no good, I can assure you.

WHO has destabilized Iraq? Not Iran! The Bush Junta is solely responsible for it. REALLY destabilized it. Slaughtered 100,000 people in the initial bombing alone. Totally botched the occupation, because of greed and ill intentions. Iran is faced with a fait accompli. A totally destroyed neighbor. Saudi Arabia, Kuwait and the UAE colluded in that destruction. They have no legitimate say in what happens in Iraq now--except in the context of a UN-sponsored peace process, where they have to sit in their chairs as equals with the other governments in the region. They live in the Middle East--but they are Bush's partners in the destruction of Iraq (along with Israel). And they have far less right to say that they represent their own people than does the government of Iran.

My conclusion is that these oil machinations against Iran are vile. They are ill intended. They are aimed at hurting ordinary people, and at destabilizing yet another legitimate government. And I think we ought to be asking ourselves some very serious questions about the traitorousness of our own government, in permitting Saudi Arabia to acquire the paper on a big chunk of the $10 trillion debt the Bushites have run up, and on their plans to sell our ports to the sultans of the U.A.E.

"The Australian," by the way, is a rightwing corporate rag--part of the Murdoch empire, which never saw a war that it didn't like. See what Global Research has to say about them--and judge for yourself how much anything that "The Australian" says can be believed, even as to basic facts, let alone slant.

http://www.globalresearch.ca/index.php?context=viewArticle&code=SYM20060909&articleId=3195

"Murdoch empire girds up for war against Iran,"
by Peter Symonds
Global Research, September 9, 2006
World Socialist Web Site

"An editorial in Monday’s Australian entitled “Endgame for Iran” is another sign that the vast resources of the Murdoch global media empire are being mobilised to support a new US war of aggression against Iran. A similar editorial headed 'A nuclear Iran is not an option' appeared in the same newspaper last week, along with an opinion piece in the London-based Times entitled 'What a shambles over Iran' and continuing agitation by Fox News commentators in the US.

"The message is: Iran has flouted UN deadlines, it is building nuclear weapons, time is running out, diplomacy is a dangerous waste of time and military action is an urgent imperative. The same theme has dominated recent speeches by Bush, Cheney and Rumsfeld over the past week, reflecting a definite shift in the Bush administration. Its purpose is to demonise the Tehran regime and whip up a climate of fear and hysteria to justify US military action against Iran. Murdoch and his editorial boards have not missed the cue." (MORE)