This article makes me wonder what the U.S. is playing at, while I realize that in international politics everyone is out for themselves this move just seems ridiculous. Saudi Arabia cannot afford to confront Iran directly, agreeing to give the Chinese the oil they need if Iran’s exports are curtailed will, make no mistake about it, lead to a direct confrontation between Iran and Saudi Arabia. I have three reasons why Saudi Arabia should, at least in public, decline this ludicrous request.
1. Saudi Arabia cannot afford a direct confrontation with Iran. The Iran-Iraq war proved that if there is a war in the region there will be no winners (unless of course Israel is involved, and I doubt Israel will want any part of a Saudi – Iran war)
2. Iran – Saudi war will definitely spill over to Iraq. Some analysts already see the friction in Iraq as the start of a proxy war between the two groups. Iran has a small population of Sunni’s and Saudi Arabia has a small but active population of Shiites. The minorities in both countries would face serious consequences in countries that already have dubious human right credentials.
3. Any confrontation in the region, besides being devastating to the countries involved, will cause the price of oil to l sky rocket. I don’t know what happened to oil prices in WWII, though I know the war got us out of the great depression. I somehow doubt the world will be able to pay high prices for oil, specially after the current financial crises.
An alternative would be to have Venezuela or Nigeria supply the oil. They are all members of OPEC so Saudi Arabia could covertly influence them to supply it. I would stay away from asking Iraq or Saudi Arabia to supply oil to China in return for China’s support for sanctions against Iran. I wouldn’t exactly call the region a powder keg ready to blow up, it is however an oil field and while oil is not as explosive as gun powder, it burns for a long, long time when it does catch fire.