Saudi Arabia’s stance is destructive but understandable

25 april 2016 | RBC-TV

“Imagine that a free rider gets on a bus and refuses to pay. The driver is incensed and says that until the free rider gets off, the bus will not be going anywhere. Half the passengers get angry at the free rider who refuses to play by the rules while the other half get angry at the bus driver because they still need to get to wherever they are going. Now Iran is that free rider while Saudi Arabia is the bus driver,” Alexander Kurdin, the Head of the Department for Strategic Studies in Energy of the Analytical Center, said in a live interview for RBC -TV.

Alexander Kurdin
Alexander Kurdin
Department for Fuel and Energy Sector

The expert believes that while Saudi Arabia’s position may be controversial it is quite understandable: once a contract is entered into whereby either all oil producing nations play by the rules or none do, everyone will end up playing by the rules. Otherwise, if there is no binding agreement between oil producers then no matter how many declarations are made that production will be frozen none will ever be followed through. “Everyone looks at Iran that keeps expanding output and they go - so why can’t we do the same?” the expert explained. So while, on the one hand, Saudi Arabia’s stance is destructive, on the other, it is quite understandable, the expert believes.

“And now we are waiting for Iran to reach the pre-sanctions production level. And when they hit the level for production they want they will be willing to join the negotiations that are going to make much more sense and will be far more productive with Iran on board,” Mr. Kurdin believes.

As for Russia’s prospects and its role in this situation with passengers and the driver, the expert cannot say with certainty what it is. “Our capabilities are similar to those of Saudi Arabia. But at the same time, the Saudis have also got Kuwait, Qatar and the UAE by their side and many other allies. As for us, we have got plenty of output, sure but in this situation, especially next to OPEC, we cannot really expect to be treated like the driver,” Mr. Kurdin explained.

Source: RBC-TV