News / Middle East

    Iran Accuses Saudis of Oil Conspiracy

    FILE - A security guard keeps watch over oil pipelines in Aramco refinery in Saudi Arabia.
    FILE - A security guard keeps watch over oil pipelines in Aramco refinery in Saudi Arabia.

    Iranian hard-liners are lashing out at Saudi Arabia, accusing it of conspiring with the West to keep oil prices low in a bid to harm the Islamic Republic’s economy and pressure the country to conclude a nuclear deal with West.  In retaliation, Iranian hawks are urging restive Shia Muslims in eastern Saudi Arabia to rebel against the ruling House of Saud.

    Iranian hawks’ accusations have mounted over the Saudi’s refusal to cut production – in an effort to maintain its share of the global oil market – fueling the precipitous slide in prices. Crude oil prices have fallen by more than half since June, from $115 a barrel to below $50.

    "We will not forget which countries schemed to lower the price of oil," the speaker of Iran’s parliament, Ali Larijani warned darkly during a visit last month to Damascus, the Syrian capital. 

    U.S. officials deny any collusion between Washington and Riyadh.

    "The Saudis learned their lesson from the past when they curbed production to help keep oil prices high, only to see Russia and Venezuela grab some of their market share," said a senior U.S. State Department official, who declined to be named.

    The real targets of Saudi Arabia’s decision not to cut production and to contribute to the falling price of oil are America’s shale oil producers, the official argued.

    American oil production

    Thanks to shale oil, America has become the world’s largest oil producer, an emergence that has reshaped the world’s energy market.

    Though America does not export crude oil, it imports much less now, increasing reserves around the world. Global demand for oil has fallen with the downturn in global economic activity and with increased efficiency. And consumers’ switch from oil to other fuels and energy sources, including renewable energy, is helping reshape oil markets, experts say. 

    American shale oil producers have been hard hit by the slumping price of crude.

    Prices started to tumble when the Saudi-dominated Organization of Petroleum Exporting Countries (OPEC), which controls about 40 percent of the world market, failed to decide on production curbs during a November meeting in Vienna. 

    Charges of price manipulation

    Like Iran, whose government depends heavily on oil revenues, other economically hard-pressed exporters such as Russia, Nigeria and Venezuela have accused Saudi Arabia of manipulating oil prices for political purposes.

    FLE - Iranian President Hassan Rouhani has urged ending his country's isolation.FLE - Iranian President Hassan Rouhani has urged ending his country's isolation.
    x
    FLE - Iranian President Hassan Rouhani has urged ending his country's isolation.
    FLE - Iranian President Hassan Rouhani has urged ending his country's isolation.

    Kremlin aides have decried low oil prices as part of an anti-Russian plot hatched by the United States and Saudi Arabia to push their country toward collapse.

    But the loudest conspiracy accusations come from Tehran. 

    The weekly newsletter affiliated with Iran’s Islamic Revolutionary Guards Corps (IRGC), the elite military group that protects Iran’s theocratic Shia Muslim regime, last month threatened revenge on the Sunni-ruled Gulf kingdom “with all the means Iran has at its disposal,” Memri TV recently reported. It’s part of the Middle East Media Research Institute, a U.S.-based nonprofit that monitors Mideast media.

    Memri also reported that Amir Mousavi, a former IRGC diplomat and director of Iran’s Center for Strategic and International Studies, recently warned, "Saudi Arabia’s move is a suicidal step in the struggle against Iran in the region."

    "So far, Tehran has held back and has acted in moderation," Mousavi continued. "... Saudi Arabia is certain that Iran will not respond easily, but it seems that this time the situation is different, and if necessary Saudi Arabia’s economic interests in the region and in the world will be harmed."

    Retaliatory measures

    Some anti-Saudi Iranians already appear to be retaliating, urging disaffected Shiites in eastern Saudi Arabia to rebel. An IRGC-affiliated Twitter account on December 20 posted, "People must defend themselves against the repeated military attacks by the Al-Saud regime."

    Iranian threats toward U.S. ally Saudi Arabia are nothing new. But with the region roiled by vicious sectarian struggles, the war of words risks pouring fuel – cut rate or not – on Shia-Sunni fires.

    Tehran’s tougher language is at odds with U.S. President Barack Obama’s conciliatory comments about Iran. Last week, in an interview with National Public Radio, he said Iran has an opportunity via talks about a nuclear deal "to get right with the world." He held out the possibility of opening a U.S. embassy in Tehran and offered the prospect of Iran being accepted as a "successful regional power."

    Nuclear talks resuming

    Nuclear talks are set to resume next week in Geneva between Iran and the P5 + 1 – the United States, China, France, Russia and the United Kingdom, plus Germany. Western governments have long feared Iran has been developing a nuclear program to build weapons; Tehran insists the country needs nuclear power for energy purposes.

    In November 2013, Iran made a one-year deal with world powers to freeze its nuclear program in exchange for easing international sanctions against the country. The deal since has been extended until July.

    At a conference Sunday in Tehran, Iranian President Hassan Rouhani said the country needs to end its political isolation so its economy can grow. The moderate-inclined Iranian president has been criticized by Iranian hard-liners for his determination to seal a nuclear deal. Iranian hawks are wary of any compromising with the West.

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    Comment Sorting
    Comments
         
    by: Anonymous
    January 07, 2015 6:04 PM
    They're driving out the Fracking business. It has move up to #2 supplier to US supply but cost about $70 a barrel to make which means low gas prices will kill the industry and jobs and eventually supply which means prices goes up after. Iran sees a conspiracy in everything.

    by: Brad Arnold from: St Louis Park, MN
    January 07, 2015 2:37 AM
    It is important to understand Iran's accusation in context. Iran is being severely distressed by low oil prices, and is also an enemy of Saudi Arabia (Iran is Shia, and the Saudis are Sunni Muslim). Predictably, when a government is stressed, they seek to divert attention to an exterior enemy, to avoid internal dissent. Obviously, any fair minded person knows that it is unreasonable to expect Saudi Arabia to cut their oil production dramatically just to boost oil prices for the rest of the oil producers who are still maintaining their production quota. BTW, although it is conventional wisdom that a Saudi cut in oil production would fix the current oil glut, that is not really the case. Simple solutions for simply minds. Frankly, a lot of the reasons analysts in the mass media give for the current dramatic fall in oil prices are obviously spacious, and easily proven wrong in an adult conversation.
    In Response

    by: xiaowei1 from: Australia
    January 07, 2015 7:55 PM
    Hi Brad, hydrogen sounds good in theory, but you cannot get the same amount of energy out as you put in to make the energy. Then the Hydrogen needs:
    1) To be made which requires energy to do so
    2) to be stored using more energy - you lose the hydrogen when stored for more than a couple of weeks as it is very difficult to contain,
    3) it then needs to be transported (in the liquid state for density efficiency)
    4) Then made available for use by people at refuelling stations (which don’t exists and need to be built), stored in liquid form for density efficiency.
    5) Lastly, you then convert the hydrogen to electricity again with loss in stored energy due to the conversion.
    Hydrogen is both expensive and will never be cheaper than the energy used to in trying to get it to consumers.

    in short, Hydrogen is a means to store energy for later use though fairly inefficiently – provided the energy to make it comes from renewables it will be more efficient than oil, BUT not necessarily cheaper unless there is massive production and distribution station in place (and there are very few to none). Even if you can make it for free, the problem of storage and distribution still exist, with conversion back into electricity also playing a part in the diminishing returns.

    So, to say there is no pollution is to ignore the pollution when actually making, storing, or transporting hydrogen. if made from renewables this will reduce the pollution of course, but then why not directly transfer the energy over the electrical poles in place right to the consumer (which already exists) with much less loss in energy. By adding hydrogen to the equation, you are adding to the complexity – conversion of energy, transportation, distribution, and back to electricity.
    In Response

    by: Brad Arnold from: St Louis Park, MN
    January 07, 2015 6:57 AM
    This has been verified by two independent respectable parties, so it is almost certainly legitimate. OTH, I realize almost nobody who reads this understands the significance. I am not associated in any way with this company, and only seek to give this example as one of many LENR energy technologies emerging.

    "Solar Hydrogen Trends Inc. invented a Hydrogen Reactor. The technology provides multifactorial hydrogen reactor with elevated hydrogen production due to a set of sixteen (16) physical and chemical processes, acting simultaneously on the hydrogen bonds. The hydrogen reactor uses water as main fuel and its emissions are 100% clean (clean air).

    The technology is non-volatile and produces free flowing hydrogen which can be compressed or used to convert to another form of energy.

    The technology can be used as a free standing electrically powered device to produce unlimited amount of hydrogen at world’s cheapest rates or as a “bolt-on” hybrid solution.

    On input of 500 watts, the mini reactor produces an output of 2,797 cubic feet of hydrogen per hour (electricity equivalent 221.5 kWh), at cost of $1.80"

    by: mr nobody from: usa
    January 07, 2015 2:11 AM
    " Iran last month threatened revenge on the Sunni-ruled Gulf kingdom “with all the means Iran has at its disposal,”"

    The future question will not be "when will we disarm", but rather "who will be the last to be armed" - nobody

    by: annymous from: usa
    January 07, 2015 1:42 AM
    Great news, oil prices is down. . USA should use alternative energy to stop getting oil from middle. east . By using natural gas and other sources of Energy ,we can stop getting oil from overseas. this can make our economy better . middle east use oil revenue to support terrorism . . by cut the prices of oil into $3/barrel. we boast the economic and no money for isis ,Osama bin laden and Muslim brotherhood which is the richest terrorist organization.

    by: Marcus Aurelius II from: NJ USA
    January 06, 2015 11:11 PM
    63 Rubbles to the US dollar today. Only 17 more to go to reach a new record.

    Meanwhile Radio Putinik has acquired another American participant from the lunatic fringe of US politics, Amy Goodman of WBAI (NYC) Pacifica Radio, the station for people who hate themselves but would rather blame all the world's problems starting with Adam and Eve getting thrown out of Eden on America.

    by: Anon
    January 06, 2015 8:35 PM
    Why should the Saudi's give market share to Iran?

    Classic tragedy of the commons: i.e. their shared resource was wasted due to the self interest of one of the participants.
    In Response

    by: Canon fudder
    January 07, 2015 10:20 PM
    lol, so why do oil producing countries have trade agreement? Seems you're ignorance speaks more than your thought, foolish.

    by: John
    January 06, 2015 7:40 PM
    Iran accuses everyone of conspiracy (just like Russia, North Korea and alike). That's the common property of all authoritarian regimes. It's a political schizophrenia of a sort.

    by: Marcus Aurelius II from: NJ USA
    January 06, 2015 7:16 PM
    "Iranian hard-liners are lashing out at Saudi Arabia, accusing it of conspiring with the West to keep oil prices low in a bid to harm the Islamic Republic’s economy"

    Yeah, Russia and Venezuela too. Now tell me something I don't know. It's more fun watching oil prices and the Russian Ruble fall than watching a sports match. The payoff is cheaper gasoline, electricity, and heating bills. Go Saudis!
    In Response

    by: Anonymous
    January 07, 2015 12:00 AM
    How will you feel if someone laughs at your misfortunes when the dollar falls?

    by: meanbill from: USA
    January 06, 2015 6:21 PM
    REMEMBER when the US pundits and propagandists blamed Halliburton and Bush for the high price of oil and gas in the US and around the world?..... [could it have been Saudi Arabia all along?]..... [could they the Saudis be helping a fellow US Sunni Muslim now, against Russia and Iran?]..... [why is the US and the Saudis in bed together, arming and training Sunni Muslim ultra-extremists to wage war on the Shia Muslim led government of Syria?]..... [and using oil to destabilize Russia and Iran?]...... [ask yourself, what is the connection?]..... [Sunni Muslims?]..... [just unanswered questions?].
    In Response

    by: GH
    January 07, 2015 5:59 AM
    Gene, glad you decided what's obvious, you don't seem biased at all, especially when you're loving it, typical redneck mindset. Anyway, I agree, its usual KSA is manipulating oil prices for american interest. Not going to really work.
    In Response

    by: Gene from: Texas USA
    January 07, 2015 4:50 AM
    Meanbill: We could all speculate and theorize or we could
    accept the obvious. There is too much production and falling
    demand. Iran is trying to intimidate Saudi Arabia into cutting
    production thus raising the price of oil. All of these months
    of world powers "negotiating" with Iran over the nuclear threat
    accomplishing nothing while ordinary world supply and demand brings them to their knees. I love it!

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