INDIA-SRILANKA-MALDIVES

Indo-Saudi Ties: Is Riyadh Trying to Outflank Tehran?

Riyadh appears to have reappraised its relationship with New Delhi, evidenced by high-level visits and meetings. Why is this happening now? Is it a necessary move to enable Saudi Arabia to regain its regional influence and shore up its flagging export markets; or is it aimed at to reducing Iran’s regional influence?

Saudi Arabia has long held a position of eminence as the guarantor of oil supplies to the world, due to its enormous proven reserves. Thus, for instance, when international oil supplies were reduced during the war against Iraq, Saudi Arabia had no problems in increasing production and limiting negative international impact.

This position, however, has been eroded in more recent times. The US has made rapid advances in recovering oil and gas from shale deposits on the US mainland, previously seen as commercially unviable. Consequently, it has overtaken Saudi Arabia to become the world’s largest producer of oil.

Simultaneously, Russia has faced an increasingly antagonistic European gas market, so it has engineered the sale of US $400 billion worth of gas to China over the next thirty years. While not overly disturbing to Saudi Arabia, it is the potential sale of Russian oil to China on an equal scale that has Riyadh worried. Saudi Arabia’s economy depends entirely on its energy sales. With reduced markets, Riyadh will have reduced means and influence to maintain its economy, which could have major ramifications for the continued rule of the House of Saud.

Saudi Arabia undoubtedly sees India’s growing economic strength as a means of shoring up its flagging oil sales. India requires large quantities of oil and gas. It needs to re-start and then maintain its economic growth, and must also comply with growing international demands to use cleaner fuels. Cleaner oil and gas will help India move towards those goals.

It is more than likely, however, that Saudi Arabia wishes to expand its relationship with India to diminish Indo-Iranian ties. Riyadh and Tehran share a mutual distrust, brought about by competition between the two based on both the Sunni-Shia divide and differences in political ideology: Iran is a nominal democracy, while Saudi Arabia remains a monarchy. The House of Saud sees the latter reason as an existential threat; by extension, Iran becomes a threat and, therefore, an enemy to be countered. For Iran, Sunni-majority Saudi Arabia is seen as guilty of suppressing its Shi’a minority, effectively making them second-class citizens. Interestingly, Saudi Arabia’s oilfields are located in the east of the country, where the Shi’a citizens are in the majority.

As Saudi Arabia sees it, Iran has been under international sanctions for some time now, leaving its economy in a state of disrepair. Its oil infrastructure is collapsing and Tehran is becoming increasingly dependent upon the few countries permitted to purchase its oil. If Riyadh could, therefore, reduce the number of countries buying Iranian oil, it would effectively further undermine Iran’s economy. India is one of those countries permitted to buy oil from Iran, albeit in reduced quantities; hence Riyadh’s attempts to sell more oil to India and, concurrently, enhance its ties with New Delhi.

Essentially then, Riyadh is trying to shore up its diminishing energy market, but simultaneously seeks to counter Iran’s regional influence. It is merely repeating what it did during the oil crisis of the early 1970s: using oil as a strategic weapon to achieve its goals.

–  Lindsay Hughes, Research Analyst,
   Indian Ocean Research Programme,
   Future Directions International, Australia.

 

 

 

 

Sharing:

Your comment

Your email address will not be published. Required fields are marked *