The Fuse quotes Global Energy Center Nonresident Senior Fellow Sara Vakhshouri on how Saudi Arabia and Iran remain dependent on maintaining their oil markets open despite their recent downturn in diplomatic relations:
“Even though this is the strongest direct tension between Iran and Saudi Arabia since the 1980s, the possibility of a military clash or any action that could interrupt the oil production and supply flow of the two countries is very less likely,” Sara Vakhshouri, president of Washington-based consultancy SVB Energy International, told The Fuse. “Both countries are heavily dependent on their oil revenue, particularly at the current time of low oil prices.”
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“Ironically, the events could actually contribute to the market’s expectation of oversupply in the near future as it loses hope in cooperation between the two countries to control output,” said Vakhshouri.