US Sanctions on Iran Become a Golden Chance for Saudi Arabia

US Sanctions on Iran Become a Golden Chance for Saudi Arabia

Over the year, since the US pulled out from the 2015 nuclear deal with Iran, the strife between the two nations that began with a pebble has turned into a mountain. While Washington is calling for changes to the agreement, which restrained Iran from producing the potential nuclear fuel for 15 years, the Gulf nation refuses to comply.

The result: soaring tensions between the decades-old rivals and the gradually increasing sanctions on Tehran. Grabbing it from the neck, the Trump administration has been striving to hit the financial system of the Arab country, with an aim of isolating it from the international market.

Starting from reimposing sanctions on oil, the administration steadily began to hit several other sectors in hope of getting a better deal. In the recent weeks, it ended the waivers that permitted other countries to purchase Iran’s oil, and also imposed sanctions on its steel, copper, aluminium and iron industries.

On Saturday, the Iranian president, Hassan Rouhani stated that his country is facing “unprecedented” pressure from these international sanctions. Making a noteworthy comparison, he said that the impact of America’s increasing pressure is similar to that of the devastating Iran-Iraq war.

Although the fray between the two nations is escalating with the time, none of them has achieved any substantial upshot. However, a country in a different corner is silently ready to take advantage of the feud.

Oil, which happens to be the greatest asset of Iran, is also the most powerful weapon of the Middle Eastern nation, Saudi Arabia. While President Donald Trump hardens the oil sanctions on Iran, the Arab Kingdom is poised to turning the situation in its favour.

Saudi Arabia is preparing to raise its output, so that it can meet the requirement of oil purchases that it has attained for June. These requests have notably diverted towards the Kingdom from countries that had to stop buying Iranian crude. Moreover, other Persian Gulf Arab countries that have spare production capacity — Iraq, Kuwait and the UAE — are expected to walk on the same path.

While Saudi Arabia has plenty of room to foster the output without breaching its OPEC+ target agreed for the first half of 2019, others don’t. If other countries would attempt to take benefit from Iran’s woes, they are likely to breach the December agreement. However, it is not the case with the Kingdom, whose output last month was over more 500,000 barrels a day that is below its target of 10.3 million barrels a day.

Despite the possible outlooks and escalating hardships, Iranian President Rouhani has given signals of having no intentions to capitulate. “Surrendering is not compatible with our culture and religion, and people do not accept it,” he said.

Rouhani also stating that they will overcome the situation, if they stand together. However, the only plan the country seems to have is to wait for the upcoming US presidential elections, which could possible enthrone a new president.

Even in a situation that Rouhani described to be as severe as its landmark crisis in the 1980s, the country shows no signs of flexing. The Trump administration, on the other hand, is also ardent about making it more arduous for its Arab rival. Besides, the third player in the act, Saudi Arabia is all set to make most of Iran’s difficulties.

While the two Iranian rivals are playing around in the situation, its Tehran that is bearing severe consequences. The country believes that surrendering to America is more dangerous than suffering from the sanctions. However, looking at how the other nations are looking for an opportunity to utilize the situation, Iran certainly in a position where it should reconsider its stance.

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