The escalating tension between Iran and Saudi Arabia over the disputed offshore gas field is presenting the first serious challenge to the newly re-established relations between these two rival nations following their diplomatic thaw in March 2023.
Iran is gearing up to start drilling in the disputed field, arguing that 40 percent of the field is located within its territorial waters. Saudi Arabia counters by asserting “exclusive rights” and accusing Iran of violating principles of international relations. The conflict isn’t limited to these two rivals, with Kuwait asserting its joint ownership of the field with Saudi Arabia, dismissing Iran’s right to exploit it.
If left unresolved, this dispute threatens to ignite an uncontrollable escalation of tensions and even create an opportunity for the Islamic Revolutionary Guard Corps (IRGC) and its naval branch, Niroye Daryai Sepah-e Pasdaran (NEDSA), to seize Saudi and Kuwaiti assets in the waters. Such an alarming possibility could reignite the conflict between Tehran and Riyadh.
The offshore field, known as Arash in Iran and Durra in Saudi Arabia and Kuwait, is located in the southwest of Iran’s Kharg Island and in the south of Abuzar offshore oil field off the Kuwaiti coast. Discovered in 1967, it is estimated to hold over 300 million barrels of oil reserves and 20 trillion cubic feet of gas reserves (60 tcfg according to some other estimates). Production estimates also range from 800 million to 1 billion cubic feet of gas per day, and 84,000 barrels of oil.
Iran asserts that 40 percent of the field falls within its territorial boundaries. Saudi and Kuwaiti officials reject Iran’s claim, arguing that the entire Al-Durra field is jointly owned by their two nations. The two Gulf states maintain that only these two states possess full sovereign rights to exploit the resources in that region.
The field’s impact on the global gas market will be minimal, with all its production expected to be consumed by the domestic electricity and energy sectors of the three countries. The development of the field holds particular importance for these three nations due to their increasing gas needs and recurring energy crises.
In 2001, the Islamic Republic deployed equipment to develop the field, but Kuwait, threatening to sue Iran in international courts, stopped the regime from conducting any activity until a definitive result was reached in determining the maritime borders of the two countries. In the wake of this halted progress, Saudi Arabia initiated discussions with Kuwait regarding the field’s development.
Saudi-Kuwaiti talks were paused in 2012 due to disagreements over gas production sharing and pipeline issues. In March 2022, the two Gulf countries reached an agreement and started exploratory and development activities on the field via Al-Khafji Joint Operations (KJO), a joint venture between the state-owned entities Kuwait Gulf Oil and Saudi Aramco Gulf Operations. According to the KJO’s plan, daily gas production from this field was supposed to be one billion cubic feet, which will be divided equally between Saudi Arabia and Kuwait. Iran strongly opposed the plan, arguing that a major part of this field is located in Iranian waters.
Iran then decided to initiate drilling plans in the field, a move that immediately sparked contention. Kuwaiti officials argue that Iran has no right to drill, stating that there is no clearly established border and that Iran should wait until this boundary is determined. In response, Iranians have countered by asserting that “if the development in the field must be halted due to the lack of a clearly established borderline, then Kuwait should similarly be denied rights to the field for the same reason.”
For decades, Iran and Kuwait have disputed their maritime border areas. The two countries have engaged in several rounds of talks, but they failed to determine them due to challenges such as discrepancies in historical claims, differing interpretations of international law, differing economic interests, and most significantly, the political conflict between the two countries.
According to Iranian sources, “in the past, Kuwaiti authorities acknowledged that the field was jointly owned with Iran, but now dispute Tehran’s rights to the field.” If the assertions from Iranian sources are indeed accurate, this dramatic change from past assertions reportedly occurred after the establishment of the neutral zone with Saudi Arabia.
While the reasons behind Kuwait’s shift in position remain ambiguous, Iranian interpretations suggest that the agreement with Saudi Arabia might have emboldened Kuwait, leading to a more assertive stance in denying Iran’s ownership of the Al-Durra field.
In recent months, Iran attempted to initiate talks with Saudi Arabia, but the Saudi officials reportedly said they don’t believe there are shared fields between Saudi Arabia and Iran that warrant such discussions. An unnamed official from the National Iranian Oil Company told the Kuwaiti newspaper, Al-Jarida that “if a consensus on the division of this field is not reached, Iran will not allow Kuwait and Saudi Arabia to carry out any development plan.
Instead, it will take pre-emptive action to establish its presence in the field.” The official further threatened that to resolve the issue, the sides should reach an agreement that benefits Iran as well or, alternatively, Iran would block development of those resources, where neither side would be allowed to drill.
This wouldn’t be the first time Iran has initiated aggressive measures over disputed territories. In 2001, the regime resorted to military force against Azerbaijan over the Alborz oil field in the contested waters of the Caspian Sea when Baku began surveying the oil field. Iranian warship, the Hamzah, ordered the British Petroleum oil company research vessel, which was hired by Azerbaijan, to stop exploring and to vacate the region. The regime air force then conducted daily patrols over the contested area, monitoring the activities of Azerbaijani vessels. Due to Iran’s intervention, the exploration of the area was completely halted.
This incident is particularly interesting as it parallels the current dispute between Iran, Saudi Arabia, and Kuwait, where diplomatic relations were recently re-established. Just like the current situation, the incident took place shortly after Iran and Azerbaijan had signed a security accord aimed at combating terrorism, drug trafficking, and organized crime.
If Iran were to use force over the Al-Durra field, this would mark the second time such an incident has occurred. Back in 2010, the IRGC-NEDSA sent its speed boats and frigates to disrupt drilling operations on the Kuwaiti side of the field and deployed tugboats to patrol the surrounding areas, including Saudi Arabia’s Marjan oil and gas field. Kuwait then engaged American drilling companies in an attempt to deter Iran from further disruptions.
The significance of the Arash (Durra) field to the energy needs of Iran, Saudi Arabia, and Kuwait, coupled with the differing interests of the parties involved, unclear territorial boundaries, and ongoing political rivalry, may set the stage for a new round of conflict between Iran and the two Gulf nations. Historical precedents indicate that the Islamic Republic might not shy away from using military force to assert its claims, particularly as the United States’ military presence in the region is declining.
To deter potential aggression from the IRGC, the United States should consider deploying additional military resources in the region, increasing patrols and joint exercises around the Strait of Hormuz. It should also convey to the Iranian regime its commitment to defend Saudi Arabia and Kuwait in the event of the regime’s aggression.