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News number: 9107131961

18:13 | 2012-12-31

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Oil, Iran and Stability in Middle East: Why Persian Gulf States Want to Keep Iran in Box

TEHRAN (FNA)- We are often told that Persian Gulf states like Saudi Arabia and Kuwait are deeply worried about Iran, and eager for the United States to take care of the problem.

This is usually framed as a reflection of the regional divide in the region, and
linked to concerns about Iranian growing power and the role of Hezbollah, and the omnipresent fretting about Iran's nuclear energy program.

I have read and sometimes heard senior Saudi officials voice such worries on more than one occasion, and I don't doubt that their fears are sincere. But there may be another motive at work here, and Americans would do well to keep that possibility in mind.

That motive is the Persian Gulf states' interest in keeping oil prices high enough to balance their own budgets, in a period where heightened social spending and other measures are being used to insulate these regimes from the impact of the so-called Arab Spring. According to the IMF, these states need crude prices to remain upwards of $80 a barrel in order to keep their fiscal house in order.

This, in turn, means that Saudi Arabia et al also have an interest in keeping Iran in the doghouse, so that Iran can't attract foreign companies to refurbish and expand its oil and gas fields and so that it has even more trouble marketing its petroleum on global markets. If the UN and other sanctions were lifted and energy companies could operate freely in Iran, its oil and gas production would boom, overall supplies would increase, and the global price would drop.

Not only might this new wealth make Iran a more formidable power in the Middle East region, but lower oil and gas prices would make it much harder for Saudi Arabia and other Persian Gulf states to stave off demands for political reform through social spending. Saudi Arabia could cut production to try to keep prices up, but that would still mean lower overall revenues and a budget

So when you hear people telling you how worried the Persian Gulf states are about Iran, and how they support our efforts to keep tightening the screws, remember that it's not just about geopolitics, or the historical divide between Sunnis and Shiites or between Arabs and Persians. It's also about enabling certain ruling families to keep writing checks. Keep that in mind the next time you fill your gas tank or pay your home heating bill, or the next time somebody tells you the United States ought to think seriously about a preemptive war.

By Dr. F. Barkeshli, Iran's former Governor to the Organization of Petroleum Exporting Countries (OPEC)