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News number: 9107126231

16:05 | 2012-12-11

Economy

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Iranian Parliament Think-Tank:

Saudi Oil Policy Aims to Secure Royal Family's Interests, Power

TEHRAN (FNA)- The Research Center of the Islamic Consultative Assembly (Iranian parliament) in a report on Saudi Arabia's energy diplomacy said Riyadh is violating its international undertakings in a bid to maintain its oil revenues to maintain the power of the Royal family.



"Due to certain reasons, Saudi Arabia's ideal policy in the oil market is to maintain the oil price in the long run in a bid to ensure demand for its huge oil reserves," the parliament think-tank said in a report on Tuesday, adding that Riyadh needs large investments to boost its oil production capacity to maintain its oil flow even after reduction in the oil outputs of other producers.

The report said that the policy would be against the interests of Saudi Arabia and other members of the Organization of Petroleum Exporting Countries (OPEC).

"But" the report added "the Saudi oil policy is defined and implemented in line with protecting the power of the Saudi Royal family."

The report pointed to the growing public discontent in Saudi Arabia and Saudi officials' efforts to maintain public support through distributing financial resources among people, and added that Saudi Arabia is, therefore, in dire need of maintaining its oil revenues.

Last week, media reports said that if crude prices considerably fall in the world, the economy and politics of the world's first oil producer and exporter, Saudi Arabia, would be negatively affected to such an extent that it might cause a revolution in that country similar to other Arab states.

A slump in oil prices will be in a pinch to raise the avenue needed to pay for social programs, like fuel subsidies in Saudi Arabia and Kuwait, the Christian Science Monitor wrote.

If those governments are forced to curb social spending, it could exacerbate some of the socioeconomic and political tensions that have contributed to revolutionary change across the Arab world recently, it said.