What to expect from the Saudi-Iran standoff?

Published: January 5, 2016


After Saudi Arabia sentenced 47 men on terrorism charges, capital punishment in the Kingdom has drawn global outcry. However, Iran’s reaction has been more than usual. Among those executed was Nimr al-Nimr, a Shiite Saudi citizen who participated in Iran’s blood-soaked overthrow of the Shah and lived there for a decade.

Iran’s initial reaction was threatening Saudi Arabia of dire consequences. Authorities in the Iranian capital named the road Saudi embassy is situated on after the Shiite activist from the Kingdom. The same day, the embassy of Saudi Arabia in Tehran and consulate in Mashad were vandalised and set alight allegedly by a mob.

Saudi Arabia severs ties with Iran: foreign minister

Riyadh too decided to sever diplomatic ties with Tehran by directing its diplomats to return home within 48 hours while expelling the Iranian ambassador et al. Acknowledging the complex history of Arab-Persian or Sunni-Shiite relations, it’s time to consider the consequence of the events occurring so far.

In its knee-jerk reaction to further worsening of the Middle East situation, the upstream oil supply sector has moved prices upward. For about a year, the Saudi-led strategy of keeping oil production steady against falling demand was aimed to punish Russia and Iran for their intervention in Syria on the one hand, and to make shale oil extraction unviable in the United States. Keeping the oil price steady will be harder for Saudi Arabia and its likeminded OPEC suppliers. With the fragile economic situation, both Russia and Iran have been banking on an increase in oil prices. According to analysts, the recent events are likely to give a boost to oil prices, which were expected to fall as low as $26 a barrel prior to soaring tension.

After Riyadh, Bahrain, Sudan cut ties with Iran

There is a lesser risk of an all-out war except some maritime skirmishes in the Arabian Sea between the Persians and the Arabs. Either side is likely to invest more aggressively into the proxies in Iraq, Yemen and Syria. Thus, more blood is likely to spill, resulting in larger displacement and refugee burden for neighbouring counties.

Iran-backed Saudi citizens are less likely to make any headlines within the Kingdom. However, Tehran’s supported shiites in Bahrain will become more aggressive and possibly violent.

Russia, which has of late been trying to reach out to the GCC nations, will drift closer to Iran and Syria. Driven largely by Vladmir Putin’s ambition of a greater geopolitical footprint and increased arms’ sale revenue, the fresh standoff is a win-win for the Kremlin.

Escalating tensions: Islamabad voices concern

Severing of ties with Iran puts Saudi Arabia’s gulf neighbours in a quagmire. Friends of Saudi Arabia and Iran are both closely watching the developments for now. It won’t be too long when the either-or moment scenario is before them. Oman has always preferred neutrality in the Persian-Arab rivalry. Ruled by an Ibadi family, Muscat will further perfect its delicate balancing act between Tehran and Riyadh. Qatar, which has the tendency to adopt a considerably independent foreign and security policy, shares a hydrocarbon field with Iran. It is likely to opt for the role of an influential mediator than siding with its larger Arab nation. Bahrain has also broken diplomatic relations with Iran, with United Arab Emirates downgrading them by recalling its ambassador and vice versa. Kuwait, too, downgraded ties with Iran by recalling its ambassador and expelling Tehran’s. However, experts expect Riyadh not to test its GCC neighbours too much and refrain from forcing them to sever ties with Tehran. The option can be exercised later.

Saudi Arabia will take the matter of attacking the embassy and consulate not only at the UNSC, but to international courts. With its history of ransacking the US embassy in a similar fashion decades earlier, Iran has little moral and legal ground on the issue. However, the legal and political process to prosecute Iran won’t be an immediate consequence.

Lastly, the developments will bring the US, the UK and France further closer to Saudi Arabia after the recent friction over the P5+1 deal with Iran. Merkel’s Germany will exploit its good relations with Iran and Saudi Arabia to defuse the situation.

Oil prices rise after Saudi Arabia cuts ties with Iran

Ironically, none of the Muslim countries including Pakistan, Turkey or Malaysia are in a position to defuse the situation and mediate between the Persians and the Arabs. Iran will get much closer to India with whom it has a defense treaty as well as blooming economic relationship.

Naveed Ahmad is a Pakistani investigative journalist and academic with extensive reporting experience in the Middle East. He is based in Doha and Istanbul. He tweets @naveed360

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Reader Comments (5)

  • Abdullah khan
    Jan 5, 2016 - 11:23PM

    The reaction of Iran shows that th person who was the citizen of KSA and exicuted by kSA government was Agent of Iran, it also mean that the Iran is interfering in other countries affairs and want to make itself the spiritual Ruller of Shia sect, Shia sect is present in every Muslim country and they are the citizens of that country.
    Iran also forgets it’s own draconian laws which not only made Iranian people’s prisoners but also shelling the sunny residential area on eastern bordersRecommend

  • Jamil M Chaudri
    Jan 6, 2016 - 3:32AM

    As Muslim Nations, both Iran and Arabia should be dear to the Pakistani Nation. The Saudi Royals are neither here nor there: today they are here, tomorrow they might be there! True Arab tradition is contained in Elected Government. The Saudi Royals are imposters. Iran is a democratic nation. Iran is an Islamic Republic, just the same as Pakistan. Recommend

  • Currious2
    Jan 6, 2016 - 4:18AM

    Oil prices aren’t low because the Saudi’s are trying to punish the Soviets or Iran – they are low because the USA is now the largest oil producer on the planet and they aren’t part of OPEC. Saudi don’t gain anything by slowing down oil production – the demand is just met by the USA and others – including Russia and Iran.

    Authors comments implying the Saudi/Iran dispute is going to make Russia, USA, UK move closer to either country ignores that those countries chose sides a long time ago and this dispute isn’t going to change those allegiances one bit. USA/UK will side with the Saudi’s and Russia will side with Iran.Recommend

  • ajeet
    Jan 6, 2016 - 6:34AM

    Iran should be supported against the extremist Saudi regime whose Sunni agents have occupied Shia majority Bahrain. Its lackey near our border too should be defanged and Modi should stop the peace talks.Recommend

  • Sal
    Jan 6, 2016 - 11:37AM

    Why can’t Iran stop interfering in the affairs of arab countries? Why does it always have to poke it’s nose in the Middle East and try to create instability and havoc in the Arab countries? It should focus on itself. This Iran is becoming a big trouble for everyone.
    @Jamil Choudri Iran is NOT a democratic country. I can’t believe you would say something so naive!! Iran is ruled by the Ayatollahs and NOBODY can raise a finger against them. The elections in Iran are mostly a facade where the candidates are chosen solely by the clergy to be able to run for office. At least the Saudis don’t call themselves Imams and give themselves religious titles. Recommend

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