September 28, 2009 By James Kimer

The Saudi Lever Over Iran

Writing in the Australian paper The National, Roger Stern and Bernard Haykel see the current situation in Iran as similar to the twilight of the Soviet Union:

Next, the kingdom should reprise its greatest peacemaking performance: the 1986 oil price collapse. Saudi Arabia has been given little credit for this effort, which secured western victory over the Soviet Union in the Cold War. Here’s the story: while some other Opec members cheated on their quotas by overproducing in the early 1980s, Saudi Arabia cut its production to defend the price of oil. In 1985, after years of sacrifice, the Saudis reversed course and opened the taps to regain market share. The consequent price collapse bankrupted the Soviet Union, which relied on oil for its only hard-currency earnings.

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