Crude Oil for Natural Gas: Prospects for Iran-Saudi Reconciliation

 

Saudi Arabia currently fuels its stunning 8 percent annual rise in demand for electricity with precious crude oil due to little low cost domestic natural dry gas reserves. Iran’s vast gas reserves could be used to meet the kingdom’s growing needs, but after decades of punishing sanctions its dilapidated gas fields need an estimated $250 billion in repairs. If Saudi Arabia used its investment power or buying power to help revitalize Iran’s gas industry, it would both secure the energy it needs to meet its citizens’ demands and free up its crude oil for export. While the sectarian rhetoric hurled back and forth may seem unstoppable and the timeline for reconciliation may be long, both sides are rational at heart. Indeed, the benefits of economic cooperation on energy issues could open up better relations on a range of issues. I discuss this issue at length in my new Policy Brief for the Atlantic Council. 

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