...the world is heading to another huge conflagration in the Arabian peninsula and the subsequent increase in oil prices

The attack on Saudi Arabia’s largest oil facilities last month saw only a temporary hike in the price of crude oil across the world. But the recent defeat of a Saudi Arabian military force, commanded by former Pakistani Army General Raheel Sharif, by Houthi rebels inside its own territory with over 2,000 Saudi “affiliated” soldiers — a polite word for mercenaries — is proof enough that there is serious escalation of tension. The Yemeni rebels, who are funded and armed by Iranians, have been in a proxy war for two decades now. The Iranians blamed Saudi Arabia and its young Crown Prince, Mohammed bin-Salman, for the collapse of the nuclear deal between them and the US. On the other hand, the Saudis feel that Iran is encircling them by funding uprisings in Yemen and Iraq. This can also be seen as a continuation of the centuries-long Shia-Sunni schism in Islam where both nations are the biggest players. And if this clash escalates from its current nature to a full-blown explosion, there are risks of hundreds of thousands dying. There is even the probability of nuclear escalation and, of course, the global economy is bound to be affected.  As the Saudi Crown Prince warned, oil prices will shoot to “unimaginable” levels.

India will also find itself in a horrible quandary if the downhill slide to a war is not arrested. Our economy has benefitted from a historic period of lower oil prices, without which the current economic situation would have been even worse. We have extremely good ties and historically important relations with both Iran and Saudi Arabia, although there has been a dramatic improvement in ties with the latter. India’s substantial Shia community, particularly in the erstwhile State of Avadh, have ties with Iran’s top leadership. Saudi Arabia has just promised an investment of $100 billion for us. India’s stand during a potential conflict will be interesting as it has a tough balancing act at hand. And after a relatively successful US tour, the current crisis will be a matter of immense concern for Foreign Minister S Jaishankar. But is there any need for a war in the first place? The fact is that both Iran and Saudi Arabia are at the mercy of leaders who detest each other, so the region has been a pressure cooker for decades. But Iran is feeling the heat of sanctions and is of the view that there may not be much to lose. To hit Saudi Arabia just as it plans to open up might be the best time to strike. The latter itself has seen bin-Salman purge the royalty of lackeys and hangers-on, sometimes violently and has few, if any, ways to have back-channel contacts with Iran. War should always be the last option but it seems horribly certain now.