Why Saudis Really Fear Warmer U.S.-Iran Ties

Although Saudi Arabia’s vehement anti-Iranian sentiment is often framed in terms of regional or religious rivalry, talk of loosening the punishing international sanctions regime on Iran also prompts anxiety in Saudi Arabia for economic reasons. Ahead of largely positive negotiations between Iran and six world powers in Geneva two weeks ago, a senior U.S. administration official told Reuters that Washington is willing to offer “targeted, proportional” sanctions relief in exchange for Iranian steps to curb its nuclear program. An Iran unencumbered by the sanctions that have weighed on it for decades could put a serious dent in the Kingdom’s economic platform: oil exports. Fitch, the international credit rating agency, estimated that relaxed sanctions could soon bring 800,000 barrels of Iranian oil to market, driving global oil prices down. The head of global commodity and asset allocation research at Bank of America Merrill Lynch placed the drop in prices at a stunning 10 percent.