The decades-old rivalry between Saudi Arabia and Iran has re-emerged at a difficult time, with Tehran in economic crisis due to US sanctions. The recent friction started with a tussle over oil pricing. Riyadh offered the world cheaper oil to attract consumers facing any disruption in the Iranian oil supply. The second phase of US sanctions have had a devastating impact on Iran’s oil exports, shipping and banks, hitting the core of the Iranian economy.

Iran’s oil exports have dropped nearly 1 million barrels a day, slashing its main source of revenue. More than 100 big international oil companies, major banks and oil exporters have reportedly pulled operations out of Iran. 

Meanwhile, Riyadh has boosted its oil production to ensure stable energy supplies and capture a bigger share of the market. Iran, reverting to decade-old prices to retain its foothold in Asian markets and compete with Saudi oil, has tried to maintain trade.

Banking on big-time clients like China and India, Iran could survive the economic crisis, as China can take US pressure and has US waivers allowing it to buy Iranian oil until June. China, which requires one-third of the global supply of hydrocarbons to keep its economic growth on firm footing, could well be the lifeline Iran needs — but Beijing can’t afford any delays in its oil supply. Taking advantage of this opportunity, Saudi Arabia decisively filled any void left by Iran.