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Saudi Arabia breaks diplomatic relations with Iran, what is the likely future?

Editor: Li Kun 丨CCTV.com

01-07-2016 17:36 BJT

By Huan Xu, associate Professor, deputy director, editorial department of Foreign Theoretical Trends

On January 3, global citizens were celebrating the New Year, but on that day, Iben Jubail, Minister for Foreign Affairs of Saudi Arabia, announced Riyadh will break off diplomatic relations with Tehran, and ordered Iranian diplomats to leave Saudi Arabia within 48 hours.

 

Yet again, there's turmoil in the Middle East. What is the likely future for the region in 2016? Is Saudi Arabia acting capricious? The two countries hold deep historical grievances, and it's not the first time they have severed diplomatic ties. 

Impacted by religion, race, economy, geopolitics and other factors, Saudi Arabia and Iran, the two major Gulf countries have long had rivalries against each other.

Their relations had appeared mild, but the conflicts between Yemen and Syria have sparked tensions. Iran supports Syria while Saudi Arabia supports Yemen.

Saudi Arabia is a Sunni country with the Shias accounting for a small part of its population; on the contrary, Iran is a Shiite country with Shiites accounting for 89% of its population.

The crisis was sparked by Riyadh executing Nimr al-Nimr and 46 people on terrorism charges on January 2. Nimr al-Nimr was a missionary from an eastern province that holds rich oil resources in Saudi Arabia.

As a central figure of the Shiites, he participated in anti-government demonstrations against Riyadh over injustices towards the Shiites minorities.

The execution caused Iranian protesters to attack the embassy of Saudi Arabia and set it on fire. Ayatollah Ali Khamenei, the Supreme Leader of Iran, had pledged Saudi Arabia would confront a divine revenge.

Riyadh announced Saudi Arabia will break off diplomatic relations with Tehran. Both Saudi Arabia and Iran hold much influence in the Middle East. Their actions could trigger a major impact on peace, security and the geopolitical situation. 

Sectarian divisions will be exacerbated. Iran's supporters include Shiite groups from Syria, Iraq and Lebanon. Saudi Arabia's supporters come from the Gulf countries and Sunni groups.

Iraq will be impacted as well. Additionally, on January 4, Bahrain, Sudan, the United Arab Emirates had announced they would cease diplomatic relations with Tehran or reduce their presence there.

The UN Security Council has just adopted a resolution on a political solution to the Syrian issue. The Security Council's efforts might be in vain. This would hinder regional cooperation to combat terrorism. The deterioration of Saudi Arabia-Iran relation would cause imbalances between regional countries.

Perhaps, the "base" organization "Islamic State" and other extremist terrorist forces could expand towards other regions. The United States, Russia, Germany, Saudi Arabia and France have called for Iran to ease tensions.

Will it influence China's oil supply?  For China, the core concern is oil. As the world's second largest economy, China has huge demand for oil.

Its demand for oil in 2013 has surpassed the US. Even if China’s economy slows down, China's crude oil imports will remain high in the next five years. The Middle East has much power over China's energy security. Saudi Arabia is China's largest crude oil supplier.

From January to November 2015, Saudi Arabia has delivered 46.08 million tons of crude oil to China, 1.01 million barrels per day, with an increase of 2.1% over the same period last year.

China is Iran's largest crude oil demand country. In 2015, China became Iran's largest oil partner. The volume of Iran's oil exports to China remains between 500,000 to 600,000 barrels per day.

In recent years, China has also enhanced its investments in Iranian oil and gas industries. By the end of 2014, the amount invested has reached over 50 billion US dollars (about 311.432 billion yuan).

The volatility of international crude oil price has exploded in recent days. Saudi Arabia is the largest oil producer of the Organization of Petroleum Exporting Countries (OPEC). Iran ranks the fifth largest country in terms of oil output.

Crude oil futures prices in the New York Mercantile Exchange(NYMEX)have increased 3%, to $ 38 a barrel, Brent crude oil futures price in the International Petroleum Exchange also increased by 2%. Such conflicts can impact China's oil imports and strategy.

On January 4, Chinese Foreign Ministry spokeswoman Hua Chunying said Beijing is concerned about recent developments in the Middle East, and hopes relevant parties will maintain calm to safeguard regional peace and stability.

 

( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )

 

 

Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

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