Iran Nuclear Deal Effects on the Gulf Area

Muhammad Almajid
February 22, 2016

Submitted as coursework for PH241, Stanford University, Winter 2016


Fig. 1: Iran's Primary Nuclear Facilities. [3] (Courtesy of the Belfer Center)

The interest in developing a nuclear program in Iran started in the 1950s. [1] As a result of President Eisenhower's "Atoms for Peach Program", Iran started receiving assistance from the United States (US). The program was halted after the Iranian revolution that occurred in 1979 and by the Iran-Iraq war that followed which lasted eight years. In addition, the program was almost totally destroyed because most of Iran's nuclear talent fled the country after the revolution and Ayatollah Ruhollah Khomeini was against any nuclear technology at the time. [2] Sanctions were imposed on Iran since the revolution in 1979 and were increased over time. [4] AlJazeera news has an excellent summary to the timeline of the sanctions imposed on Iran. [4] In 2013, President Hassan Rouhani is elected to office in Iran which brought some hope to the international table as he was pledging to loosen up the tension between Iran and the world powers regarding Iran's nuclear program. [5] In July of 2015, Iran reaches a Joint Comprehensive Plan of Action (JCPOA) with the P5+1 (China, France, Germany, Russia, the United Kingdom, and the United States) to make sure that Iran's program remains completely peaceful. [6] This agreement is interesting because it carries with it many political implications. Perhaps the most interesting of which is the Iran-Arab relations in the region. Although the topic is open to debate, in this report I discuss the reactions from the Arab World, Iranian relations with its neighbors, the Gulf Area security architecture after the deal and possible impact on oil production after the deal.

Reactions from the Arab World

Hussein Kalout, who is a research affiliate at the Harvard Kennedy School Belfer Center's Iran Project, summarizes the reactions from the Arab world in three distinct groups. [7] The three groups are depicted by Fig. 2:

  1. Skeptics (Pro-Saudi Bloc): This group contains Saudi Arabia, Gulf States, Jordan and Morocco. From the point of view of this group, the deal only legitimize Iran with the international system and allow it to navigate freely in the region through its proxy groups.

  2. Pro-Iran Bloc: This group contains Syria, Iraq, important fraction of the Lebanese political mainstream, and part of the Yemeni political mainstream. This group accepted the deal with exultation. They think the deal has positive effects on their hopes and empowerment in the region. Additionally, they also believe that the West had no choice but to engage with Iran in a peaceful dialogue instead of using power.

  3. Third way: This group contains North African states like Egypt, Algeria, Tunisia, Libya and Sudan. This group looks at the deal with a mixture of joy and concern.

The three groups were formed based on their view of the deal. Each country values the deal based on their geo-political and economic power. For example, Egypt is not dependent on Saudi for military purposes and, therefore, can take a different path (opinion) than the Saudis. On the other hand, Sisi, Egypt's current president, is trying to strengthen ties with the Saudis to enhance Egypt's internal economic status. [7] Similar logic can be used to explain why a country sides with, against the nuclear deal.

Fig. 2: The Arab World and the Iranian Nuclear Agreement. [7] (Courtesy of the Belfer Center)

Iranian Relations with its Neighbors

Gulf States are highly concerned that the nuclear deal was made at the expense of their good relationships with the United States. [7] Many experts believe that the tension between Iran and Saudi Arabia will escalate in the region at least in the short run. [7] This is expected due to a couple of reasons. First, sidelining the biggest two opponents of Iran in the region, namely Saudi Arabia and Israel, during the nuclear deal negotiation could only exaggerate their concerns about the Iranian nuclear ambitions. Secondly, the Iranian nuclear deal could be perceived as a shift of US attention from the Arab countries to Iran, which is unfavorable for Arab countries in the region. To a certain extent, one would expect that the future of the region depends on how the US handles this situation by showing openness to Iranian and Arab countries' joint benefits.

Regional Security Architecture

Views regarding the regional security after Iran's nuclear deal are contradictory. [7] Some regional experts believe that Iran is trying to push for a weapon-free Middle East and coming to an agreement with the world powers will shift the attention to the Israeli nuclear deal which is not compliant with the NPT (Non-Proliferation Treaty). Others believe that Iran has the capability now to actually have a nuclear weapon. The latter view could have devastating implications to the region as a cold war between Iran and their Sunni rivals in the region (i.e. Saudi Arabia and Emirates who also pursued peaceful nuclear deals) could take place in the years to come. Additionally, a competitive arms race between Iran and Saudi Arabia could take place for either one of them to show dominance in the region.

Impact on Oil

The tighter sanctions on Iran by the US and the European Union in 2012 cut its oil export revenues by 27.4%. [8] With the sanctions lifted, it is expected that Iran will try export oil and gas to improve its own economy. Furthermore, Iran promises that it will add one million barrels per day to supply over the next 12 months. [9] The question is, with the oil being at this historically low price ( ~ $ 30/bbl), does Iran has the infrastructure to produce much more than what it does now with a net profit? If Iran is able to produce and refine the oil before exportation for prices much lower than the market price, then the annual target growth rate could be reached, otherwise it is far-fetched. Another interesting fact is that Iran is part of the Organization of Petroleum Exporting Countries (OPEC) as shown by the latest version of the Journal of Petroleum Technology. [10] This means that any increase in Iran's oil exports "should be" agreed by all OPEC members. It is not surprising that any country that undergoes decades of sanctions would want to improve its economic status as soon as the sanctions are lifted, the question is whether other countries in OPEC will be cooperative with Iran regarding this issue? There could be some growing tensions between Saudi Arabia, the largest oil producer among OPEC countries, and Iran which could escalate tendencies towards a cold war in the region as I have mentioned earlier. It is interesting to end this section with a quote regarding the relationship between OPEC countries, after the nuclear deal was sturck, from one representative to OPEC from a non-Gulf region country "This new situation will just make it worse and I see no agreement to be reached within OPEC." [9]


The responses from the Arab countries to the Iranian deal differed. Some were exulted while others were unhappy. It is too early to predict whether the deal was a success or a failure to the region. Open dialogue between Iran and the Arab States, as President Obama suggested, is called for if this deal to be anywhere near successful. If these countries do not resolve their issues soon, the result could be a cold war and an arm race between Iran and the prominent Arab States (Saudi Arabia and Emirates). Perhaps an agreement between these two opposite parties can be reached if they focus on objectives they have in common or ways to help each other in the energy sector. One common interest is defeating ISIS. Another one is Israel's nuclear program and its non-adherence to the NPT. Finally, only time will answer the questions and uncertainties raised by this nuclear deal, let us hope the answers come in peace to the region and human kind.

© Muhammad Almajid. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] D. Poplawski, "The Development of Iran's Nuclear Program," PH241, Stanford University, Winter 2015.

[2] R. W. Apple Jr., "Khomeini Arrives in Teheran, Urges Ouster of Foreigners; Millions Rally to Greet Him; Bakhtiar Warns Foe Says He Will Take Strong Steps if Ayatollah Tries to Name a Regime," New York Times, 1 Feb 79.

[3] G. Samore, Ed. "Dec oding the Iran Nuclear Deal," Belfer Center for Science and International Affairs, April 2015.

[4] "Timeline: Sanctions on Iran", AlJazeera, 17 Oct 12.

[5] D. McElroy, "Hassan Rouhani Vows to Lift Sanctions on Iran", The Telegraph, 3 Aug 13.

[6] M. R. Gordon and D. E. Sanger, "Deal Reached on Iran Nuclear Program; Limits on Fuel Would Lessen With Time," New York Times, 14 Jul 15.

[7] P. Mohseni, Ed. "Iran and the Arab World after the Nuclear Deal," Belfer Center for Science and International Affairs, August 2015.

[8] D. Bird, "Sanctions Cut Iran's Oil Exports to 26-Year Low," Wall Street Journal, 29 Apr 13.

[9] D. Zhdannikov et al., "Saudi-Iran Split Dashes Chance of OPEC Deal to Curb Oil Glut," Reuters, 5 Jan 16.

[10] "General Information," Organization of Oil Exporting Countries, May 2012.