The global community has urged Saudi Arabia and Iran to observe restraint after tensions over the execution of the cleric and 46 others – Saudi Arabia’s biggest mass execution for decades. They are dependent on the volume of oil production and the volume of the market.
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Government spokesperson Kurtulmuş also said Iran has a responsibility to protect the diplomatic missions of Saudi Arabia in Iran.
Judith Dwarkin, chief economist at ITG Investment Research, said Iran’s confrontation with Saudi Arabia makes the Saudis unlikely to offset Iranian increases by trimming production.
Iraq has offered to act as a mediator to ease tensions between Saudi Arabia and Iran that escalated after the kingdom’s execution of a Shiite cleric and attacks on two of Saudi diplomatic posts in the Islamic Republic.
Prime Minister Ahmet Davutoglu on Tuesday said Turkey was ready to do everything it could to help calm flaring tensions between Saudi Arabia and Iran, after Ankara expressed alarm over the consequences of the dispute between two key Muslim powers for the region. After this diplomatic crisis, any understanding and agreement between the Saudi-led coalition and the coalition led by Russian Federation and including Iran and Iraq seems likely to become much more complicated.
Instead, “it is Saudi Arabia that will suffer”, he argued, reiterating Tehran’s harsh criticism of Nimr’s killing but condemning the violence by protesters as unjustified actions “beneath the dignity of the Iranian people”.
Saudi Arabia produces more than 10 million barrels of oil daily and exports more than seven million barrels per day.
He went on to add that the Saudi regime intends to cover up its domestic issues and recent defeats in the region, as well as exerting pressure on Iran, saying Saudi government’s regional policies have been moving toward aggression, spreading terrorism and destabilizing the region.
The US dollar hit a one-month high against a basket of currencies, weighing on oil prices as it made holding dollar-denominated commodities more expensive. But this time around, there is no sign of a deal.
Last year, Riyadh began a war in Yemen to stop an Iran-allied militia seizing power there and boosted support to Syrian rebels against Tehran’s ally President Bashar al-Assad.
Saudi Arabia, Bahrain and Sudan broke all ties with Iran and the United Arab Emirates downgraded its relations on Monday after the Saudi embassy in Tehran was stormed by protesters.
“While we still expect the sanctions to be lifted, the latest events have definitely created some last minute risk that things may not move in the direction widely expected”.
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