Saudi Arabia has dropped its oil prices to try and wreck the Iranian economy and keep Tehran�s oil exports out of major European markets, international business analysts told Sputnik.








WASHINGTON (Sputnik)�� Earlier this month, Saudi oil giant Aramco announced that it would cut oil prices for�Europe, apparently in�preparation for�Iran�s resumption of�oil exports to�the region later this year.
"The Saudis are looking to�gain a competitive advantage: this is a response to�the lifting of�Western economic sanctions on�Iran allowing the Iranians to�reenter the global energy marketplace," Eurasian Business Coalition Vice President Ralph Winnie said on�Monday.


The Iranians had high hopes of�rapidly expanding their oil revenue once international sanctions were lifted in�accordance with�the P5+1 nuclear agreement, Winnie explained, but�policymakers in�Riyadh are determined not to�let that happen.
"The Saudis are looking to�pull the rug out�from under�the Iranians," Winnie observed. "They are looking to�gain a stranglehold on�global supplies and price setting and re-establish themselves as�the key global swing producer."


Saudi Arabia�s dramatic price-cutting polices hurt it badly in�the short term, but�Riyadh was gambling that its high-risk strategy would pay off�in the long run, Winnie noted.

"For the Saudis, the fundamental issue is dominant market share," he added.


"They calculate that the price of�oil will rise eventually and when it does the suppliers with�dominant market shares will gain the most. They intend to�be the first destination for�reliable supplies of�energy."

Riyadh also sees the opportunity to�expand its share of�the domestic US market following�the collapse of�the US fracking industry as�investment in�fracking is no longer profitable, Winnie maintained.
"The Saudis therefore feel they can reap the benefits of�the collapse of�the fracking technology sector in�the US domestic oil industry," he said.


Executive Intelligence Review senior editor Jeff Steinberg told Sputnik that by�slashing their oil prices, the Saudis were targeting the US and Russian oil producers as�well as�the Iranian ones.

"Saudi Arabia is bleeding through�reserves, through�heavy costs of�the losing Yemen war and the revenue losses due to�low oil prices, which the Saudis created by�over production, targeting Russia and US shale oil, which are the Saudis� two biggest rivals," Steinberg argued.

The Saudis were locking themselves into�a self-ruinous cycle of�equating low oil prices with�their international prestige, Steinberg warned.
"A boost in�oil prices led by�the Saudis would be a signal that they have not succeeded in�beating out�their rivals, and now face major internal security problems due to�the budget shortfalls, which are unsustainable," he stated.


The low price strategy was being pushed by�young Crown Prince Mohammed bin Salman, but�he was rapidly losing credibility across�the Middle East, Steinberg noted.

People close to�the Saudis, Steinberg added, are skeptical about�Prince Salman and his schemes.
"There is a simmering revolt inside�the Royal Family, and the number two, Crown Prince Mohammed bin Nayef, is battling against�being dumped to�pave the way for�Mohammed bin Salman to�replace his father [King Salman]," he observed.


Maintaining low oil prices also served to�exacerbate the Sunni-Shia divide in�the Middle East, Steinberg concluded.
By Sputnik