Iran warned Gulf Arab oil producers against boosting production to offset any potential drop in Tehran’s crude exports in the event of an embargo affecting its oil sales, the latest salvo in the dispute between the West and the Islamic Republic over its nuclear program.Iran's threat is a de facto recognition that there is excess oil production capacity in the world beyond their ability to control. The Saudis appear to be backing down on their previously announced intention to keep prices low. Historically, the behavior of oil producing nations has been only loosely coupled with their announced intention. If I were the Saudis, I would not provoke the Iranians publicly, but would quietly boost production while denying that I was doing so. This makes political sense, because it allows the Saudis to appear not to be allying themselves with the west, while still undercutting the key threat to their existence, a nuclear armed Iran. As the Iranian plot to kill the Saudi ambassador to the United States demonstrates, the Iranians and Saudis are already in a shadow war with each other.
The comments by Iran’s OPEC governor, published Sunday, came as Saudi Arabia’s oil minister was quoted the same day denying that his country’s earlier pledges to boost output as needed to meet global demand was linked to a potential siphoning of Iranian crude from the market because of sanctions.
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Mohammad Ali Khatibi, Iran’s OPEC governor, was quoted Sunday by the pro-reform Shargh newspaper as saying that attempts by Gulf nations to replace Iran’s output with their own would make them an “accomplice in further events.”
“These acts will not be considered friendly,” Mr. Khatibi said, adding that if the Arab producers “apply prudence and announce that they will not participate in replacing oil, then adventurist countries will not show interest” in the embargo.
Why are the Iranians getting so bellicose? I can only assume that they are desperate. The actions of a country on the verge of achieving tactical military superiority would not look like this. Assassinating nuclear scientists and sanctions seem to be having the desired effect. (Caveat: I don't know who is assassinating Iran's nuclear physicists, but they are dying in numbers and by means that point to assassination.)