Meanwhile Saudi Arabia has apparently made unofficial comments that it could take up the slack caused by the withdrawal of Iran’s oil exports, compensating for any lack in the West.
Which is why, as part of Iraq’s current role heading the Organization of the Petroleum Exporting Countries (OPEC), the Iraqis are trying to discourage the Saudi’s unofficial suggestion. They want to encourage other members of the 12-member group not to compensate for Iran’s decision not to send oil to Europe. And the Iraqis are doing this in the hope that the Europeans will reverse their decision and that the Hormuz Strait will remain open.
“The first phase of the initiative is to convince OPEC countries not compensate for any loss of crude oil supplies from Iran,” a senior official inside Iraq’s oil sector told NIQASH. “Then the plan is to approach the Europeans and convince them to lift sanctions on oil exports. If this initiative succeeds, then the Iranian economy won’t be affected and the Iranians will drop their threats to close the Strait of Hormuz.”
In his capacity as the head of OPEC – the position rotates among member states on an annual basis – Iraq’s Minister of Oil, Abdul-Kareem Luaibi, is apparently seeking to persuade Saudi Arabia not to compensate for the missing Iranian oil exports. “If Saudi Arabia accepts that, then the problem would be solved,” the oil industry source said.
There are genuine fears that Iran would react by trying to use its navy to close the Strait of Hormuz. “Iran will close the Strait in retaliation, and this would also cause losses for the Gulf States,” Usama Murtada, an Iraqi political analyst, told NIQASH.
As the Abu Dhabi-based daily, The National, reported recently: “Kuwait and Qatar, without any alternative to the waterway, would be losing some US$600 million daily, while Saudi and Iraqi exports would also be seriously constrained”. In fact, Iraq would be losing more than half of its oil exporting capability if the Strait is shut down.
In closing down the waterway, Murtada said, Iran would also be delivering a message to other OPEC countries, should they choose to support European, and other nations’, sanctions against Iran.
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