Russia is apparently backing the Iranian position to a greater extent ahead of this month’s planned OPEC meeting than it had at the time of a previous such meeting in March. That gathering included Russia as a leading oil exporter although not an OPEC member, and it ended in failure after Saudi Arabia refused to move ahead with plans for a production freeze unless Iran agreed to participate. Meanwhile, Iran refused such participation, saying that it would increase its oil exports until such time as it restored pre-sanctions production levels of approximately four million barrels per day.
But Tuesday’s Reuters report points out that there is some uncertainty about the exact figure that Iran can realistically claim to be its target. By the Iranian Oil Ministry’s own accounting, output has already reached at least 3.8 million barrels per day, and some industry analysts estimate that the four million barrel figure will be within reach in two or three months. However, the Saudi Energy Ministry recently issued a statement claiming that Iran had already reached its pre-sanctions levels.
It was not clear whether the latter claim amounted to dispute of the current output calculations or dispute of what Iran’s pre-sanctions levels had been in the first place. But Reuters quotes one expert as saying that previous to the imposition of sanctions in 2012, Iran’s output might have spiked at four million barrels per day but this does not constitute a sustained production level that should be maintained as a standard for current output. It is clear that in the midst of the current climate of competition between Saudi Arabia and Iran, the former is more than willing to accept this alternative account whereas the latter will be quick to reject it.
In spite of that atmosphere, both Iran and Saudi Arabia have made statements signifying their willingness to compromise over the issue of global oil prices. Iranian Oil Minister Bijan Zanganeh, for instance, was quoted by Reuters as saying that he supports any measures that would stabilize oil prices at around 50 or 60 dollars per barrel. But Zanganeh’s commentary was lacking in detail and may have referred to global measures from which Iran still wishes to be exempted. This interpretation is arguably supported by the fact that Russia, an increasingly close Iranian ally, has explicitly endorsed such an exemption at least until the achievement of the four million barrel figure.
More to the point, Riyadh and Tehran have both undermined their expressions of willingness for compromise, in that both have held onto their previous demands – Tehran for continued output growth even as prices stabilize, and Riyadh for full participation in an output freeze by all OPEC member states, including Iran.
It remains to be seen whether either of the rival countries will back down from these demands, but their current political and diplomatic stances toward each other are certainly no cause for optimism. On Monday, it was reported that Iranian Supreme Leader Ali Khamenei had accused the Saudis of the “murder” of Iranian pilgrims in last year’s hajj stampede and crush, which reportedly killed upwards of 2,000 people. Khamenei also used his latest statement on the incident to encourage the global Muslim population to challenge Saudi Arabia over its custodianship over the holy cities of Mecca and Medina.
The escalation in July, and again this week, was not generally unexpected among Mideast policy experts. In fact, on Tuesday, Gulf News published an editorial arguing that Iran and the Saudi-led Gulf Cooperation Council were engaged in a cold war that had been getting worse for a long time and would likely continue to do so. The editorial placed the vast majority of the blame for this situation on Iran and its policies of regional interference, as with its backing of the Assad dictatorship in Syrian and the Houthi rebellion in Yemen.
Gulf News went on to say that these and other confrontational activities are evidence that “Tehran has not made the needed transformation from a revolution to a state,” and that it cannot engaged as a “responsible actor,” whether in oil cooperation agreements with its domestic rivals or diplomatic accords with its proclaimed enemies in the West. On this basis, the article also provided an indictment of recent US policy toward Iran, particularly with regard to its “obsession” with last year’s nuclear agreement and its willingness to let Iran violate the initial conditions for that accord’s implementation.
The editorial claims that such permissiveness “exacerbates the GCC states’ security dilemma,” and encourages more of the same regional aggression and non-cooperation from Tehran. And of course, many critics of the Iranian regime see this as having potential consequences far beyond the GCC, and certainly for Iran’s other regional arch-rival, Israel. On Tuesday, UPI issued a report on the current and likely future presence in Syria of Lebanese paramilitary and Iranian proxy Hezbollah.
The report argued that if Bashar al-Assad retains power in Syria, he will likely have to give the Golan Heights region to Hezbollah for the sake of his government’s stability. It also noted that Hezbollah has firmly established a major base in Syrian near the border with Lebanon, and that it plans to build up a permanent presence of 3,000 fighters in the Golan Heights, just across the border with Israel. From this starting point, Hezbollah would be in a unique position to resume what both it and Israel reportedly regard as “unfinished business” from the 2006 war that effectively ended in stalemate.
While Gulf News says that recent Iranian aggression in the region has given rise to newfound skepticism about the nuclear deal, Landau notes that Iran is “pushing the envelope” with regard to what it can get away with under that deal, even as the White House give the impression of acting as the Iranian regime’s personal lawyer in defending its compliance. Landau also accused the Obama administration of mistakenly “acting as if we are on the road to a changed Iran.” This perception is arguably reflected in that administration’s urging of Iran and Saudi Arabia to “share the region” and find their way to compromises that may in fact be out of reach.
But even as some media commentators embrace this perception by suggesting that cooperation between the two rival states is just around the corner, numerous critics of the Obama administration are pushing for a different set of policies. In one of the latest examples of this, according to The Hill, Florida Republican Senator Marco Rubio introduced legislation on Tuesday aimed forcing Iran to give back money that has been characterized as “ransom” for four US nationals who were released from Iranian prisons in January, at the time of the implementation of the nuclear deal. The confiscated funds would then be used as compensation for the victims and families of victims of terrorism in which Iran was involved.
But even as the Obama administration’s policies face increasing challenges at home, a number of European governments continue to charge ahead in expanding relations with Iran, presumably on the assumption that the Islamic Republic will be more prone to compromise and transparent dealing with regional and international powers.
Jokpeme reported on Tuesday that French National Assembly President Claude Bartolone had met with Iranian Parliament Speaker Ali Larijani during a visit to Tehran. And Deutsche Welle provided an update on the same day regarding Iranian plans to open at least two banks in the German city of Munich by the end of the year, to facilitate transactions that would possibly avoid the US dollar and thus the threat of future American financial penalties.
