Is going “cap in hand” to the Middle East the solution to the Russian oil supply gap?

Elnaz Sharifi

June 30, 2022

Reports from the G7 summit, and a renewed hope for the revival of nuclear talks, have raised the question of whether the Ukraine crisis will hasten the return to Iranian oil after years of sanctions.

As the UK, EU and US attempt to stymie Putin’s war efforts through a series of increasingly harsh sanctions, the phasing out of Russian oil imports as a part of this retaliation has created a problem. The gap left by Russian energy supply must be filled as the West grapples with soaring fuel prices that are exacerbating inflation, and it seems that Middle Eastern states are the only producers with sufficient spare oil capacity to offset the losses – namely Iran, Saudi Arabia and the UAE.

The recent G7 summit has rekindled discussion as to the viability of seeking imports from these oil-rich nations to minimise reliance on Russia and tackle the production gap, with a French official proposing that crude oil from Iran should be permitted to return to the market to stabilise oil prices.

In the past few months, Western governments have taken measures that appear to be to this end. The UK’s decision to pay the historic £400 million debt to Iran earlier this year, connected to the release of hostages Nazanin Zaghari-Ratcliffe and Anooshesh Ashoori, may have been linked to a renewed need for Iranian oil supplies.

Historically, producers across Europe have purchased Iranian crude oil, but with the exit of the US from the Joint Comprehensive Plan of Action (JCPOA) and sanctions reinstated in 2018, Russian oil became the main replacement. The current circumstances, however, may dictate a return to Iranian oil as a necessary  strategy to ease the pressure of rising oil prices.

Re-establishing a nuclear deal, also discussed at the G7 summit, would see the lifting of sanctions against Iran and allow them to ramp up their oil production and exports – an estimated 1.5 billion barrels of oil could be unlocked if a deal is finalised. This temporary increase in output and the diversification of supply could alleviate the burden on consumers and businesses.

Whether a deal will be reached, however, is highly uncertain. Hopes of reviving talks after a month-long impasse were dashed this week after two days of indirect talks between Tehran and Washington, facilitated by the EU, failed to amount to anything. Obstructing their agreement are Iran’s conditions that the deal must be guaranteed to stay in place under successive US governments and that the designation of the “foreign terrorist organisation” on the Islamic Revolutionary Guard Corps (IRGC) be removed, both of which are highly improbable for the US to agree to. 

Moreover, the notion that the UK should turn to the Middle East for oil has alarmed some who are unsure of what would be compromised in pursuit of this particular solution. Human rights organisations criticised Boris Johnson’s strategy as “trading blood for oil”, highlighting the harmful message it would send if the government condemns Putin’s actions by empowering other regimes that disregard human rights. This was echoed by Keir Starmer who accused the Prime Minister of “going cap in hand from dictator to dictator” for oil.

The government, however, defended their decision to consider agreements with Middle Eastern nations. Liz Truss argued that Saudi Arabia “is not a global security threat in the way that Russia is”, suggesting that perhaps the urgency of the energy crisis demands a choice between the lesser of two evils.

Nevertheless, the willingness of Middle Eastern governments to replace Russian supply is unknown. Despite calling for the conflict to end, it is likely that Iranian Supreme Leader Khamenei will seek to strengthen bilateral relations with Russia in light of his past assertions that the conflict was “rooted in NATO provocations”. Saudi Arabia has also shown caution about increasing production too rapidly, and the Gulf states more broadly have maintained a largely neutral stance in the conflict between their Western allies and Russia, their partner in OPEC+.

Despite recent cause for anticipation, Middle Eastern oil does not seem like a viable option for the UK. The prospect of turning to Iran for oil hinges on the establishment of a new nuclear deal, which currently seems unlikely, and other states in the region are restrained in expanding their output. The removal of this option paints a bleak picture for the government, who now face added pressure to find alternative routes to solve the energy crisis.


Written by Elnaz Sharifi

Elnaz Sharifi is an undergraduate student at LSE and Assistant Editor for 1828

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