These are the signs of a long crisis when Iran accuses Russia and Saudi Arabia of stealing its share of oil! Iran knows very well that no one stole a barrel from it or from its share. The market has its rules that have not changed since ages ago; the oil market is for those who can sell oil and not those who sit on it.
Iran has a massive reserve underground but it produces a little and it will sell even less. Due to the American sanctions against it, it lost half of its exports so far, although the US embargo on its oil purchases did not go into effect yet and will in November.
Iran is not prohibited from producing or exporting oil but buyers will have to choose between Iran’s oil or trade with America. Of course, most countries abandoned buying Iran’s oil in order not to lose the American market.
Amid this dangerous situation, the Iranian government is, before its people, trying to create justifications to the bad situation it has led the country to and it’s doing so by blaming others such as accusing Saudi Arabia and Russia of stealing its market share. The truth is the entire blame must be directed at the regimeAbdulrahman al-Rashed
Desperation in Iran
Iranian foreign, oil and commerce ministers toured half of the world trying to tempt buyers by decreasing prices, accepting their local currency and accepting a bartering system. However, most of these countries refused to buy oil from Iran despite all the temptations. Hence, it’s not Saudi Arabia and Russia that stole oil but this is Iran’s hostile policy which cost it its markets, clients and revenues.
As long as Tehran wants to play a heavy game by militarily deploying in the region, igniting wars, supporting terror groups and insisting on its military nuclear program, then it must tolerate the price.
Iran immediately lost more than a million barrels which it could not sell out of its daily production of 2.5 million barrels. It will probably lose another million barrels during the next weeks when the sanctions are implemented. Iran’s share will shrink to no more than half a million barrels and it will have to sell it for a very low price – this is if it could because the American government intends to harass it until its oil exports are zero.
Iran’s losses are doubled because its revenues will collapse as its exports decline and then the cost of imports will increase due to the American boycott campaign against it. We must note that the Iranian government’s dream to develop its capabilities to double its oil production so it reaches five million barrels a day failed after global companies withdrew.
Amid this dangerous situation, the Iranian government is, before its people, trying to create justifications to the bad situation it has led the country to and it’s doing so by blaming others such as accusing Saudi Arabia and Russia of stealing its market share. The truth is the entire blame must be directed at the regime, which put its foreign military projects before its domestic commitments, and since it militarily and politically expanded in the region, it should have expected a counter attack.
The blame game
Tehran seeks to create a foreign enemy, Saudi Arabia in particular, and we do not expect it to go far in accusations against Russia because it’s not in a situation that allows it to confront two major global powers at the same time: the US and Russia.
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The Iranian regime’s behavior is reminiscent of what Saddam Hussein did at the end of his war with Iran as he blamed his country’s economic hardship on Kuwait, which he accused of stealing oil. He also blamed Saudi Arabia and the UAE claiming they were decreasing oil prices in the market to intentionally harm Iraq’s economy.
There are always shifts in the market as even with the decrease of oil exports of countries like Iran, Libya, Venezuela and others, there are countries whose production increased like the US who along with Russia became among the largest producers in the market. Despite the increased production by capable countries like Saudi Arabia and Russia, the prices continue to increase.
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Saudi Arabia and Iran are two oil-rich countries but the difference is in the philosophy and in how to handle this oil. In Iran, ever since the religious system assumed power, oil has been the state’s means of implementing its ambitions of expansion and wars.
As for Saudi Arabia, it’s the same Saudi Arabia in the 1970s, 1980s and afterwards; it looks at oil as a commodity that it relies on in its revenues to run the country’s economy. The result is that Iran became an economically destroyed country that brags about its production of missiles and nuclear reactors and the Revolutionary Guards. Saudi Arabia, however, brags about successful companies like Aramco and SABIC and about its participation in stability and development along with the region’s countries.
This article is also available in Arabic.
Abdulrahman al-Rashed is the former General Manager of Al Arabiya News Channel. A veteran and internationally acclaimed journalist, he is a former editor-in-chief of the London-based leading Arab daily Asharq al-Awsat, where he still regularly writes a political column. He has also served as the editor of Asharq al-Awsat’s sister publication, al-Majalla. Throughout his career, Rashed has interviewed several world leaders, with his articles garnering worldwide recognition, and he has successfully led Al Arabiya to the highly regarded, thriving and influential position it is in today. He tweets @aalrashed.