Saudi Arabia and Iran

Shiite Mullahs of Iran consider Sunni Saudi Arabia is an impostor and the Shiites are the true inheritors of Islam. As such, the Saudis should fear a nuclear-armed Iran. Although the biggest exporter of oil in the world, Saudi Arabia, with only 25 million people, cannot match Iran with more than 70 million. Iranian armed forces are many times larger than the Saudi forces and Saudi Arabia's heavy dependence on the United States for security is at the root of al-Qaeda's antagonism to the Saudi ruling class. Emergence of Shiite-dominated Iraq also adds to the Saudi Arabia's concerns about Iranian domination of the Middle East. As such, Saudi Arabia's vulnerability will increase if Iran explodes its own nuclear bomb. It will simply increase Saudi Arabia's dependence on the United States and invite further attacks by al -Qaeda.

However, there is a way Saudi Arabia can use its oil weapon against Iran. Now the oil prices are falling steeply and instead of cutting oil production to spike up the prices, Saudi Arabia should increase its oil production and let the prices fall even more steeply. Saudi Arabia has enough foreign exchange reserves to weather falling prices. But Iran, with its larger population and greater military spending, might find falling prices unmanageable. Falling oil prices might also force Iran to back away from its costly nuclear programme. At least, it will make Iran less threatening. With oil prices falling, Iran will not be able to threaten the world with oil weapon and the United Nations can go ahead with sanctions if Iran continues its nuclear weapon programme.