The Untold Story Behind Saudi Arabian Oil Policy During the Iran-Iraq War

The Iran-Iraq war, which lasted from 1980 to 1988, had a significant impact on the global geopolitical landscape. While the conflict was primarily fought on Iraqi and Iranian soil, its ramifications were felt far beyond the region. One of the key players in this war was Saudi Arabia, a major oil-producing country with immense influence over the energy markets.

The Importance of Oil in the Iran-Iraq War

Oil played a pivotal role in shaping the dynamics of the Iran-Iraq war. Both countries heavily relied on oil revenues to finance their war efforts. Iran, under the newly established Islamic Republic, aimed to counter the Iraqi invasion and secure its dominance in the region. On the other hand, Saddam Hussein's Iraq sought to expand its influence and take control of Iran's oil-rich Khuzestan province.

Saudi Arabian Oil Policy and the Iran-Iraq War: What Drives Saudi Arabian Oil Policy?

by Alexander Hay (Kindle Edition)

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Saudi Arabia's Diplomatic Balancing Act

Saudi Arabia faced a complex dilemma during the Iran-Iraq conflict. On one hand, they had historical rivalries with Iran and were concerned about the spread of Iranian revolution within the region. On the other hand, Iraq, under Saddam Hussein's regime, posed a potential threat to Saudi Arabia's stability and security.

In light of these challenges, Saudi Arabia pursued a delicate balancing act in its oil policy. They acknowledged the importance of supporting Iraq to contain Iranian influence, but they also feared a victory by either side would upset the regional power dynamics and jeopardize their own security.

Saudi Arabian Oil Policy

As the world's largest exporter of oil, Saudi Arabia possessed significant leverage over the global energy markets. Understanding their pivotal role, the Saudis strategically used oil as a diplomatic tool during the Iran-Iraq war.

Saudi Arabia increased its oil production in an attempt to offset the loss of oil supply from both Iran and Iraq due to the war. By doing so, they prevented a significant oil price shock and ensured the stability of the global energy market. This move earned them substantial geopolitical influence.

Furthermore, Saudi Arabia openly supported Iraq financially and politically. They provided financial aid and arms to Saddam Hussein's regime, reinforcing Iraq's capabilities to continue the war. The Saudis feared that a successful Iranian victory would embolden revolutionary sentiments within their own borders.

The Impact on Global Oil Markets

Saudi Arabia's oil policies during the Iran-Iraq war had a profound impact on global oil markets. Their increased production helped mitigate the loss of oil supply from both countries, preventing a drastic price increase. This stability in oil prices was crucial for the global economy, as many countries heavily relied on affordable oil supplies.

However, the Saudis' support for Iraq also contributed to a prolonged conflict, leading to more destruction and loss of lives. The war disrupted oil production in both Iran and Iraq, affecting their long-term capacity to meet global oil demands.

The Saudi Arabian oil policy during the Iran-Iraq war played a pivotal role in maintaining stability in global oil markets. By increasing their production and supporting Iraq, they ensured that oil prices remained relatively stable. However, this policy also contributed to a prolonged and devastating conflict, impacting the region and the global energy landscape.

Moving forward, understanding the intricacies of oil politics during the Iran-Iraq war can provide insights into the complex dynamics that influence Saudi Arabia's current oil policies and their role in global geopolitics.

Image Credit: Shutterstock

Saudi Arabian Oil Policy and the Iran-Iraq War: What Drives Saudi Arabian Oil Policy?

by Alexander Hay (Kindle Edition)

5 out of 5

Language	:	English
File size	:	1812 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
Word Wise	:	Enabled
Print length	:	104 pages
Lending	:	Enabled

FREE

Saudi Arabian oil reserves are the largest in the world. This fact takes on vital significance in light of the Saudi's financial position. Historically, Saudi Arabia has had rather limited financial needs which has allowed it to vary its production according to Saudi desires rather than by necessity. This has placed Saudi Arabia in the theoretical position of dominant producer within OPEC, with the ability to lower production to support OPEC pricing policy in weak markets, and raise production in order to punish members whose actions go against the wishes of OPEC or Saudi Arabia.

However, Saudi Arabia has often been forced to take actions concerning oil policy which have been decidedly against its long term economic interests, and furthermore, against its long-term political interests as well. The three main examples of this phenomena are the Saudi policy reversals of 1979, 1982, and 1986.

This book attempts to explain the reasons behind Saudi oil policy.