Saudi Arabia and Iran square up

The Saudi Arabia-Iran crisis will result in prolonged sectarian tension in the Gulf and an escalation in the region's conflict. However, a deliberate military conflict between the two can be discounted

The two political giants of the Middle East and the two powerhouses of Opec, Saudi Arabia and Iran, stand eyeball-to-eyeball across the Gulf. The stakes have seldom been higher: these two countries alone have the potential capacity to produce some 14 million barrels a day (b/d) of oil, nearly half of total Opec supply. Saudi Arabia's concern at the proposed lifting of sanctions on Iran and the prospect of Iranian production returning to pre-sanctions levels of 3.6 million b/d, and possibly more, constitutes one of the elements in the persistent rivalry between the two countries. The recent escalation of tension is the latest and most dangerous element in that tussle. A deliberate military co