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Iran-Kuwait Oil Feud Feeds Gulf Tensions

Oil lies at the heart of tensions between Iran and its Gulf Arab neighbors as they vie for hegemony over the world's key oil reserves.
By Gabe Kahn.
First Publish: 1/5/2012, 3:47 AM

Kuwait City
Kuwait City
CC/Mohammad Alatar

Amid heightened tensions in the Persian Gulf over Iran's nuclear program and threats to close the strategically vital Strait of Hormuz, an old fashioned oil feud is boiling to the surface.

Kuwait on Wednesday summoned the Iranian Charge d’Affaires in Kuwait City to explain recent remarks by Iran that it planned to develop unilaterally a disputed gas field.

Khalid Al Jarallah, Kuwait's undersecretary of the foreign affairs, presented a protest to Iranian diplomat Sayed Shihabi,” the Kuwait News Agency (Kuna) reported.

“The diplomat was summoned after the managing director of National Iranian Continental Shelf Oil Company (NICSOC) unveiled an Iranian plan to produce oil at the continental shelf area in a unilateral manner unless a relevant agreement was reached with Kuwait,” the report added.

The Kuwait complaint followed remarks by Mahmoud Zirakchianzadeh, the head of Iran’s Offshore Oil Company, on Sunday indicating Tehran would begin unilateral development of the disputed offshore Durra gas field in the Persian Gulf if Kuwait failed to respond to its joint development offer.

“The emphasis presently is on joint partnership strategy rather than competition,” the official IRNA news agency quoted Zirakchianzadeh as saying.

“We are hopeful to reach a conclusion with Kuwait over the development of the shared Arash field. However, if Iran’s positive diplomacy is turned down, we will be carrying on our efforts at Arash field unilaterally just as we did in Hengam oil field,” he added.

The Durra field has been disputed by Tehran and Kuwait City since the 1960s.

Oil market observers say Iran's move is likely intended to force Kuwait to agree to less than favorable terms after ten years of deadlocked negotiations over the field.

Al Jarallah said that the disputed natural gas-rich maritime border area was subject to bilateral negotiations for final demarcation and neither side should act unilaterally in the area until it is fully delineated.

Meanwhile, Iran has already begun unilateral development on its own in its part of the offshore Hengam oil field it shares with Oman, which has also raised the ire of Gulf Arab states.

The move by Tehran to monopolize the Persian Gulf's oil comes as Saudi Arabia and its Gulf Arab allies increasingly regard Tehran as not only a rival for hegemony over the Gulf, but a potential military threat as well.

In December 2012 the six members of the Riyadh-led Gulf Cooperation Council - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE - rallied around a call by King Abdullah of Saudi Arabia to transform their economic alliance into a diplomatic and military union.

The GCC has also begun moving to expand its ranks with Egypt, Jordan, and Morocco, comprising the short-list of countries being eyed to bolster Riyadh's strategic ballast against Tehran.