“The consequences… will be felt far beyond its Eastern Province”

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January 2, 2016 by AK

Saudi Arabia has executed an ayatollah popular with the 15% Shia minority:

The execution of a vocal critic of Saudi Arabia’s ruling royal family has caused international outrage and a serious escalation of diplomatic tensions in the region, with unrest predicted in Shia-majority areas.

Including the Eastern province, where most Saudi oil is produced. Simon Tisdall comments by reminding readers of the obvious:

Iranian verbal attacks, if purposefully stepped up (and backed with smuggled weapons, as the Saudis allege), may further inflame opinion in Eastern Province and Bahrain, leading to bigger, destabilising demonstrations.

But Iran going Saudi on the Saudis?

Iran can choose to increase economic pressure on Riyadh, which is already running big current account deficits, by flooding the international market with cheap oil.

No, Iran can’t really choose to flood the market: it’s what it’s going to do regardless of the oil price and Saudi politics. For months now, Iran has been saying that once the sanctions are lifted, it will try to produce as much crude as possible – for export, naturally – and will sell down its inventories.

This said, if unrest in the Eastern province boosts the oil price, Tehran will obviously benefit – as will the large neighboring oil producer formerly called the Minor Satan by the ayatollahs.


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