The Saudi Objective Behind Delaying the JCPOA

Radio Farda - The escalation of tensions in relations between Tehran and Riyadh has not only geopolitical dimensions but has also caused tremors in the stock and currency markets of both countries, as well as in the Gulf region. Reza Valizadeh asked Fereydoun Khavand about the current level of aftershocks from this tension. Fereydoun Khavand: What is happening in the relations between Iran and Saudi Arabia is undoubtedly a widespread diplomatic crisis, but it seems very unlikely that either side would want or even be able to escalate to direct military confrontation. Geostrategic experts generally share this view, and markets and economic circles have reached the same conclusion, which is why there is no panic in the regional economy. Nevertheless, there are plenty of signs of concern. On Monday, in the Tehran free currency market, the price of each US dollar rose by seven to ten tomans, reaching 3680 tomans. The exchange rate for remittance dollars also reached 3714 tomans. Following the announcement of a reduction in diplomatic relations between Iran and the UAE, particularly the price of the Emirati dirham increased, reaching 1008 tomans in the remittance market. In Saudi Arabia, the value of the Riyal against the dollar significantly decreased. Many regional stock markets - in Riyadh, Qatar, and the UAE - faced declines in their overall indices on Monday. After the recent tensions in relations between Tehran and Riyadh began, economic observers focused primarily on the reaction of the oil market. What consequences will recent events in the relations between these two Gulf powers have for oil prices? In the hours before noon on Monday, the price of Brent oil in London reacted to these tensions by rising four to five percent, but by the end of the day, it fell again, even dropping a few cents lower than before. This indicates that oil market players initially reacted emotionally under the influence of geopolitical assessments. However, soon, fundamental market data overcame these emotional behaviors. The fundamental data refers to the existence of excess oil in the market and the possibility that tensions in relations between Iran and Saudi Arabia could lead both sides to flood the market with cheap oil, potentially lowering prices even further. What impact could tensions between the two countries have on the implementation of the JCPOA and Iran's integration into the global economy? One of Riyadh's main objectives is to obstruct this process. The Saudis knew well that the execution of a Shia cleric could provoke strong reactions from the Shia world, and those who attacked the Saudi embassy in Tehran fell into the trap set by the Saudis, damaging Iran's economic image. What could serve Iran's interests is that Iran, despite Saudi Arabia's sabotage, manages to achieve a normal position in the international economic community through the sanctions relief process before it is too late; otherwise, it is Riyadh that will emerge victorious.