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Nick Cunningham

Nick Cunningham

Nick Cunningham is a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics. He is based in Pittsburgh, PA.

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Saudis Snub Obama Over Iran Deal

The U.S. is seeking a rapprochement with Iran over its nuclear program, potentially ending several decades of hostility. But while the U.S. is extending an open hand to Iran, other countries in the Middle East are casting a wary eye towards the negotiations.

In fact, it is starting to appear that Gulf Arab states could be a major impediment to a final agreement over Iran’s nuclear program. Led by Saudi Arabia, many of the oil-producing members of the Gulf Cooperation Council (GCC) are skeptical of, if not downright hostile towards Iran. With little trust between Iran and its Arab neighbors, it will be hard to get all of the Middle East on board for an agreement. On this, GCC states find themselves in the same camp as Israel.

The Obama administration surely thought it could get countries like Saudi Arabia and Bahrain to get behind a nuclear deal, owing to the fact that they are close allies of the United States. Related: ISIS Still Hampering Iraqi Oil Industry Progress

But in a surprise move, Saudi Arabia’s King Salman decided not to attend a summit hosted by U.S. President Barack Obama in Camp David this week. As recently as May 8, Saudi Arabia confirmed that the King would attend the meeting, intended to assuage the security concerns of Gulf countries over the pending nuclear negotiations.

Ostensibly, the Saudi King is staying behind to monitor the security situation in Yemen, as the conflict enters a temporary cease-fire beginning on May 13. “There is zero tension,” a Saudi official reportedly said in an effort to downplay the significance of Saudi Arabia’s decision to blow off the Camp David event, according to the Washington Post. “In fact, the relationship is as strong as it has been in quite some time. Our understanding is that the Saudis and other GCC leaders are quite pleased with U.S. positions and the substance of Camp David, including any assistance we are going to provide.”

However, the New York Times reported that Saudi Arabia was disappointed with what the U.S. offered through Secretary of State John Kerry, when he met with the King in Riyadh last week. Saudi Arabia was apparently looking for a much stronger assurance of U.S. support, such as a defense treaty. The U.S., however, is not willing to go that far, which likely led to the Saudi King’s decision to cancel his trip to Camp David. Related: Oil Price Recovery May Be Too Much Too Soon

Bahrain, Oman, and the UAE will also not be sending their heads of state. Instead, the four Gulf nations will send deputies. Only the leaders of Kuwait and Qatar will attend.

Even worse, the Saudi government is reportedly mulling over the possibility of pursuing its own nuclear weapons program, precisely due to its security fears from Iran. The Wall Street Journal reported on May 7 that Saudi officials feel that the 10-year restrictions on Iran’s uranium and centrifuge stockpile included in the framework agreement will not be enough to permanently block Iran from acquiring nuclear weapons. “We prefer a region without nuclear weapons. But if Iran does it, nothing can prevent us from doing it too, not even the international community,” Abdullah al Askar, a former top Saudi official on foreign affairs told WSJ.

Meanwhile, the Obama administration is also seeking to beef up the nuclear deal to counter criticism from Congressional opponents. U.S. negotiators are hoping to include provisions that automatically reinstate sanctions if Iran violates the terms of a deal, removing the need to go back to the UN for consensus, where Russia and China could block a return to sanctions. Related: Oil Sector May Not Cause Financial Apocalypse After All

What to make of all of this? The Obama administration has an increasingly small needle to thread. With boisterous opposition from Israel, Congressional Republicans, and now perhaps much of the GCC, the U.S. government is in a race against the clock to come to terms with Iran before the whole thing falls apart.

The one thing going for it is the fact that Iran itself is signaling its enthusiasm for a post-sanctions reality. The Iranian government is secretly courting western oil firms for investment, which could only be possible if a deal is reached. The same is true for a dramatic rise in oil production. The National Iranian Oil Company (NIOC) projected its production would rise to 5 million barrels per day by 2020, up from 2.7 million barrels per day last year. Again, that will only be possible if Iran successfully attracts billions of dollars in new investment. The desire to see sanctions lifted could make Iran more amenable at the negotiating table.

But unless the U.S. can do more to make Saudi Arabia feel comfortable, the nations of the Gulf Cooperation Council (GCC) – whose support the U.S. has stated will be critical – may undermine a comprehensive deal with Iran.

By Nick Cunningham of Oilprice.com

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  • al funday on May 12 2015 said:
    If you were the king of Saudi, you wouldn't trust 0bama either.

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