Saudi-Iran deal first step to boosting regional oil security prospects

But there is less optimism on additional Iranian exports, and many near-term risks remain

The Chinese-brokered deal to restore relations between Saudi Arabia and Iran may not necessarily prevent regional conflict or unlock additional Iran crude, but analysts believe it improves the long-term security of Saudi oil installations. The move will certainly be remembered as Beijing’s first big breakthrough on the Middle Eastern diplomatic scene. But is also an attempt to safeguard its oil purchases, given that it buys a lot of crude from both Saudi Arabia and Iran—even if much of the volume from the latter is not included in official statistics due to sanctions relating to Tehran’s alleged nuclear weapons programme. As a result, much of Iran’s crude trade takes place on the grey market