Gulf braces for fallout after USA exit from Iran deal

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Saudi Arabia is monitoring the impact of the USA withdrawal from the Iran nuclear deal on oil supplies and is ready to offset any shortage but it will not act alone to fill the gap, an OPEC source familiar with the kingdom's oil thinking said on Wednesday.

Saudi Arabia has expressed support for the USA pulling out of the nuclear deal, saying it did not adequately address Iran's behavior in the region.

The agreement puts limits on Iran's nuclear programme in exchange of the lifting of worldwide sanctions.

Saudi Arabia applauded Trump's announcement, but said it would seek to develop its own nuclear weapons if Iran does.

At an Arab League summit last month hosted by Saudi Arabia, the country's King Salman said the regional body agreed to "renew our strong condemnation of Iran's terrorist acts in the Arab region and reject its blatant interference in the affairs of Arab countries".

The US President declared on May 8 that the country had withdrawn from the Iran nuclear deal due to it being "defective at its core", despite attempts by European Union countries to persuade him to keep the deal.

"The Secretary-General reminds all parties to the conflict that they must uphold global humanitarian law, including taking steps to protect civilians", said a statement issued on behalf of the Secretary-General, by his Spokesperson Stéphane Dujarric. Preventing the two countries from having a nuclear-weapon capability and competing in a nuclear arms race is the goal.

"What the full impact on Iranian flows will be is still hard to estimate", Petromatrix strategist Olivier Jakob said.

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The other looming debacle is whether a U.S. pullout from the Iran deal could trigger a nuclear arms race.

Oman, the back-channel for US-Iran talks that paved the way for the 2015 accord, said Wednesday "the option of confrontation is not in the interest of any party".

The Kingdom of Bahrain has also supported the decision of Trump.

But Saudi Arabia has enough oil production capacity - now at 12 million barrels per day (bpd) - to maintain oil market stability, the source added.

Riyadh has long accused its regional archfoe Tehran of supplying Yemen's rebels with ballistic missiles, a charge Tehran denies.

He stated that Iran must "cease providing ballistic missiles to terrorist organizations, like so-called Hezbollah and the Houthis".

"The recent Arab summits in Jordan and Saudi Arabia were clear in expressing the extreme exasperation from Iran's actions in the Arab region and in calling for the need to alter this behavior", Abul Gheit continued.

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