Yves here. This report about Iran muscling Saudi Arabia through its Yemeni allies is based on a single but credible source, Middle East Eye. Needless to say, having Iran and the Saudis negotiating directly isn’t a development the US will like much. But it’s already tossed its toys out of the pram by withdrawing from the JCPOA and then overplaying its hand in trying to impose conditions for rejoining.
By Tsvetana Paraskova, a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. Originally published at OilPrice
Iran is looking to persuade its regional rival Saudi Arabia to help it to sell Iranian crude oil on international markets in exchange for limiting attacks from the Iran-aligned Houthi rebels in Yemen on Saudi oil infrastructure, Middle East Eye reported on Wednesday, quoting Iraqi officials with knowledge of recent secretive Iranian-Saudi talks in Baghdad.
Iran is currently negotiating with the signatories to the so-called nuclear deal, as well as indirectly with the United States, to potentially return to the Joint Comprehensive Plan of Action (JCPOA). The U.S. withdrew from the deal in 2018 and slapped sanctions on Iran’s oil exports, which have crippled Iranian crude sales abroad. Despite the U.S. sanctions, Iran has been exporting part of its crude oil, and exports have been estimated at around 500,000 bpd recently.
Yet, until the sanctions are in place, Iran is looking for alternatives to have its oil sold on the international markets, and is reportedly looking to negotiate with Saudi Arabia for this. The Saudis, for their part, are looking to end the recent flare-up of attacks on Saudi Aramco oil facilities from the Houthis in Yemen.
Saudi Arabia and Iran held direct talks in Iraq last month, the Financial Times reported at the time. The talks reportedly involved the proxy war in Yemen and the recent increase of attacks from the Houthis on oil facilities and oil infrastructure targets in Saudi Arabia.
According to Middle East Eye’s sources, Iran and Saudi Arabia held another round of talks in Iraq last week, again focused on the war in Yemen.
During the talks last week, Iran “offered to sell it [the oil] to the Saudis at a price lower than international prices on the condition that the Saudis sell it on the world markets in their own way,” a senior Iraqi official close to Iran and familiar with the talks told Middle East Eye.
Saudi Arabia demanded an end to the Houthi attacks, and this was their biggest interest in the talks, according to the Iraqi officials familiar with the talks.
This story only makes sense if Saudi Arabia lifts its blockade in exchange for the Houthis not going after Saudi cities and oil facilities in Saudi Arabia itself. Otherwise the Houthis will never agree to it. But this story may be part of a larger pattern and that is the reconfiguration of forces in the Middle East going on right now. Saudi Arabia knows that most US effort and forces will now either going east to face off with China or north to face off with Russia. And I would guess that it did not escape notice in Riyadh that Israel can go all “Dracarys” over Gaza but when they chop up one dissident journalist in one of their embassies, they are the worst people in the world. Consider the following..
Right now Saudi Arabia is opening up ties with Iran as they both have a common motive – a profound mistrust of Washington. The emir of Qatar, Sheikh Tamim bin Hamad Al Thani, also made a trip this week to Saudi Arabia pointing to a normalization of relationships. And this visit had all the royal bells and whistles so was not something on the sly. It way be that Qatar has been acting as a go-between the Saudis and Iranians as they have good relations with the later. Turkish Foreign Minister Mahmut Cavusoglu also made a three-day visit as well so you can see a pattern developing. Perhaps the Saudis are worried that if the US goes back into the Iran nuke deal, that this might leave the Saudis swinging in the wind. This being the case, it might be better to extend diplomacy now with the Iranians.
In addition, Iranian Foreign Minister Javad Zarif may be packing his bags for a visit to the United Arab Emirates as well. If in all this the Saudis can lower down the risks of war and negotiating an end to the Yemen war, then that would put a stop to the hemorrhaging of billions of dollars a month to the Saudi budget which is now needed elsewhere. And any thoughts about the Saudis normalizing relations with Israel are dead now. They died in Gaza. And all those countries that normalized relations with Israel are probably rethinking this as their people are outraged about the news coming out of there. So perhaps long term, conflicts in the Middle east may only be local affairs that don’t ratchet up international relations. One can hope.
“normalizing relations with Israel are dead now. They died in Gaza”
I would doubt that. The Arab states have all cried about how Israel treat the palestinians for all these years, but they have not given one single helping hand.
A handy map of how useful the Arab countries have been in helping the Palestinians
I think this kind of development will come as no surprise except to western experts. For what it’s worth, according to the regional press, both sides have confirmed that the talks are taking place, although oil has apparently not yet been mentioned.
Medium-sized states surrounded by enemies don’t have the Big Power luxury of ideological obsessions or sulks. They are generally willing to do deals if it’s in their interests, and are much more pragmatic in practice than western-dominated analysis would have you believe. Iran and Saudi Arabia are rivals, backing different sides in conflicts such as Lebanon and the Yemen, and manoeuvring for advantage and influence in countries where there are mixed Sunni and Shia populations.But they aren’t going to fight each other directly, only through intermediaries.
The Saudis have always known that they can’t defend themselves against a serious attack. They bought expensive weapons from the West to curry political favour, and as a way of making sure that western interests and western nationals would be in danger if anyone attacked them. That worked OK for a long time, but MBS has squandered a lot of that political capital. Although I suspect the West would still come to the aid of the Saudis in the event of a direct attack, their behaviour in the Yemen has alienated a lot of their previous supporters. At some level they must realise this. Both they and the Iranians have much to gain from a general lowering of temperatures, and this kind of initiative is, as I say, only surprising to western experts.
The biggest chit that the Saudi tyrants can call in is the petrodollar.