Russia's oil spats with Saudis mask bigger Iranian threat

Moscow

COMPETITION is growing in Russia's biggest oil market. While Saudi Arabia's encroachment in Europe is getting all the attention, the biggest threat comes from another part of the Middle East - Iran.

The world's largest oil exporter has started shipping crude to traditional Russian markets such as Poland and Sweden, but Saudi supplies to Europe won't increase by enough to reduce prices, said Texas-based consultant Stratfor. In contrast, a surge in Iranian exports after the lifting of sanctions could erode the value of Russian shipments to the region as soon as next year, according to KBC Advanced Technologies.

Tougher competition in Europe, the destination for almost 70 per cent of Russia's oil exports, comes as the country is already battling recession. Oil and gas sales account for about half of government revenues and the commodity-price slump has amplified the economic blow from international sanctions over Ukraine. An increase in Irani…