International Business Times
January 12, 2016
By Christopher Harress
Dr. Cohen was cited discussing the situation in Saudi Arabia.
On the surface, that may seem like a major mistake that directly hurts Riyadh, but the concerted strategy led by Saudi Arabia is aimed at preventing Iran from reemerging as a major political and military player in the region after years of being under heavy U.S. economic sanctions, explained Ariel Cohen, a senior fellow with expertise in global energy at the Atlantic Council, a Washington, D.C. think tank.
“The Saudi policy of keeping the spigots open and keeping production up is really just for geopolitical reasons, despite the damage to its economy,” said Ariel Cohen, a senior fellow with expertise in global energy at the Atlantic Council, a Washington think tank. “The center of their thinking is about efforts to constrain Iran, and the dynamic that is driving that Saudi oil policy is the sectarian rivalry between the Sunni Saudis and the largely Shia Iranians.”
Riyadh’s bet on over-producing oil to work against Iran came at a time when China began moving from an export-driven economy fueled by Middle Eastern oil to a more sustainable consumer economy, like the United States. In short, China needs less oil than before and that hurts oil-based economies.