"Saudi Arabia takes strategic retreat in the face of Iranian threat"

Business Materials 14 March 2012 15:36 (UTC +04:00)

Azerbaijan, Baku, March 14 / Trend S.Isayev, T. Jafarov/

Saudi Arabia has taken a strategic retreat in the face of a possible treat from Iran, the European Union Economic Advisor Mehrdad Emadi told Trend.

The advisor was commenting on the latest news about Saudi Arabia's Oil Minister Ali Al-Naimi claiming the country will not be able to fully compensate possible world market oil deficit in case of hardened sanctions on Iran.

Al-Naimi also noted that Saudi Arabia does not pursue such goals, and all previous news reports about the country promising to substitute Iran's oil exports are false.

"The statement about Saudi Arabia not being able to fullfill the oil deficit might have been a personal opinion of the minister," Mehrdad Emadi said. "We should wait for a few days, before the official statement on this issue is published".

"If the statement turns out to be true, this might be as a result of Iran giving Saudi Arabia a proper reaction to its intention of increasing its oil exports," Emadi noted.

He said that if another, harder wave of sanctions hits Iran, the Islamic Republic will not remain calm.

Emadi also mentioned the price of oil on the world markets, noting that if Saudi Arabia does not increase their export, prices could jump as high as $130-135 per barrel.

"If the prices jump higher, this would be very significant," Emadi said. "It would also affect such countries as South Korea and Japan, and the West, pressured by the oil crisis, will be forced to negotiate with Iran".

The EU formally imposed an oil embargo on Iran and agreed to a freeze on the assets of the Iranian Central Bank on January 23, but existing contracts will be honored until July 1.

Iran's Foreign Ministry on Feb. 15 summoned the ambassadors of EU countries. The ambassadors of Italy, Spain, France, Greece, Portugal and Netherlands in Tehran were summoned to Iran's Foreign Ministry, in connection with sanctions imposed on the Islamic Republic.