Face to Face: Saudi Arabia-Iran



In the last five years, the majority of the Middle Eastern countries have been either directly or indirectly involved in armed conflicts. About 32 percent of documented weapon imports worldwide are to this region.

Saudi Arabia has a significantly larger budget for military spending, although Iran’s is harder to determine. According to Radio Farda, Iran’s defence budget is estimated at $7bn annually.

Saudi Arabia, in turn, spends about $56bn. This does not including recent deals with Spain and the United States worth an estimated $3bn.  

Based on SIPRI’s 2017 report, Iran imported four air defence systems from Russia that are excluded from the arms embargo imposed on the country.

The United States remains the Gulf region’s main supplier. Nearly 50 percent of the United Kingdom’s arms exports go to Saudi Arabia, according to SIPRI. Most of these imports are used by Saudi Arabia in its ongoing war in Yemen.

The overwhelming majority of Saudi arms imports are from the US and European countries.




Iran’s economy grew by 7.4 percent from 2016-17, which was a rebound from the previous year. The International Monetary Fund assessed in February 2017 that the boost in the Iranian economy was based on the expansion of oil production.

The economy’s upward movement was attributed to the increasing trade in hydrocarbons, according to Navid Kolhar, a financial analyst in the capital, Tehran.

The non-oil sector constituted barely one percent of total growth and economic growth was mainly driven by Iran’s exports, especially to the Asian market.

In spite of the recorded growth, economic difficulty persisted because of structural weakness in the financial system more generally. Inflation, meanwhile, was brought down to 9.5 percent in 2016.

Given the nature of natural resource-dependent economies, however, the boost has not necessarily translated into greater job opportunities for ordinary Iranians. The unemployment rate continues to hover around 11.4 percent for the second year running.

Saudi Arabia: 

From January 2017 to January 2018, Saudi Arabia recorded negative growth despite efforts by authorities to diversify the economy and lessen its dependence on oil.

The country possessing 22 percent of the world’s oil reserves has pressed other OPEC members to cut oil production to raise global prices. But Saudi’s non-oil sectors continue to struggle, recording a mere 0.6 percent growth, according to Bloomberg.

Saudi Arabia continues to work out how to sell five percent of its state-run oil producer Aramco – a deal that could raise more than $100bn.

The plan is at the heart of an ambitious economic reform programme to wean the country off oil, which includes a new $500bn megacity near the Red Sea. It is hoped the extra money from the sale will make Saudi Arabia less reliant on its black gold in the long term.



Saudi Arabia:

Based on OPEC’s data, the oil-rich kingdom is the largest exporter of petroleum and the oil and gas sector contributes about half of its GDP.

In addition to petroleum production, Saudi also exports natural gas, iron ore, gold and copper.

The kingdom produces more than 10 million barrels of oil per day, while consuming three million domestically.

Despite being the largest oil exporter in the world, Saudi Arabia and other OPEC member states were forced to slash production in an effort to restore plummeting oil prices.

The price crash was the result of surplus American oil production, which currently stands at about nine million barrels a day. This spurred Riyadh into action as it attempted to expand and diversify the Saudi economy.  


Decades’ worth of economic sanctions on Iran have forced it to adopt a multi-faceted approach. Nevertheless, oil continues to account for almost 80 percent of all exports.

According to Global Firepower, Iran currently produces more than four million barrels a day, 1.8 million of which are for domestic consumption.

Foreign investors resumed trading with Iran in 2015 when sanctions were lifted under the nuclear deal with world powers.

Between December 2015 and January 2016, at a time when nuclear development restrictions were finalised, oil exports witnessed a two-fold increase to reach almost two million barrels a day.

The numbers were consistent throughout 2017, except for April that year.


Iran and Qatar co-own the world’s largest natural gas field, the offshore South Pars/North Dome. Iran’s territory covers 3,700 square kilometres in the Gulf.

France’s Total has invested in the natural gas market via the National Iranian Oil Company and is helping develop South Pars.

Iran produces about 880 million cubic metres of gas per day and it is estimated to increase production to 1.2 billion cubic metres by 2021, the Iranian financial publication Finance Tribune reports.


Source: Al Jazeera News