In the past five years, most Middle Eastern countries have been directly or indirectly involved in armed conflicts. About 32 percent of documented weapon imports worldwide are to this region.
Saudi Arabia has a significant budget for military spending, and although Iran’s is harder to determine, according to Radio Farda, it is estimated at $7bn annually.
Saudi Arabia, in turn, spends about $56bn. This does not including recent deals with Spain and the United States worth an estimated $3bn.
The United States remains the Gulf region’s main supplier. Nearly 50 percent of the UK’s arms exports go to Saudi Arabia, according to SIPRI. Most of these imports are used by Saudi Arabia in its ongoing war in Yemen.
The overwhelming majority of Saudi arms imports are from the US and European countries.
Iran’s economy grew by 7.4 percent from 2016-17, a rise from the previous year. The International Monetary Fund assessed in February 2017 that this boost was a result of the expansion of oil production.
Navid Kolhar, a financial analyst in Tehran, agrees, adding that the economy’s upward movement was attributed to increasing trade in hydrocarbons.
The non-oil sector was barely one percent of total growth, and economic growth was mainly driven by Iran’s exports, especially to the Asian market.
In spite of the recorded growth, economic difficulty persisted because of structural weakness in the financial system. Inflation, meanwhile, was brought down to 9.5 percent in 2016.
Given the nature of natural resource-dependent economies, however, the boost has not necessarily translated into greater job opportunities for ordinary Iranians. The unemployment rate continues to hover around 11.4 percent for the second year running.
From January 2017 to January 2018, Saudi Arabia recorded negative growth despite efforts by authorities to diversify the economy and lessen its dependence on oil.
The country, which possesses 22 percent of the world’s oil reserves, has pressed other OPEC members to cut oil production to boost global prices. But Saudi’s non-oil sectors continue to struggle, recording a mere 0.6 percent growth, according to Bloomberg.
Saudi Arabia continues to work out how to sell five percent of its state-run oil producer Aramco – a deal that could raise more than $100bn.
The plan is at the heart of an ambitious economic reform programme to wean the country off oil, which includes a new $500bn megacity near the Red Sea. It is hoped the extra money from the sale will make Saudi Arabia less reliant on its black gold in the long run.
Based on OPEC’s data, the oil-rich kingdom is the largest exporter of petroleum, with its oil and gas sector contributing about half of its GDP.
In addition to petroleum, Saudi also exports natural gas, iron ore, gold and copper.
The kingdom produces more than 10 million barrels of oil per day while consuming three million domestically.
Despite being the largest oil exporter in the world, Saudi Arabia and other OPEC member states were forced to slash production in an effort to restore plummeting oil prices.
The price crash was the result of surplus US oil production, which currently stands at about nine million barrels per day. This spurred Riyadh into action as it attempted to expand and diversify the Saudi economy.
Decades of economic sanctions on Iran have forced it to adopt a multi-faceted approach. Nevertheless, oil continues to account for almost 80 percent of all exports.
According to Global Firepower, Iran currently produces more than four million barrels a day, 1.8 million of which are for domestic consumption.
Foreign investors resumed trading with Iran in 2015 when sanctions were lifted under the nuclear deal with world powers, in return for which Iran agreed to curb its nuclear programme.
Between December 2015 and January 2016, as the nuclear restrictions on Iran were being finalised, oil exports witnessed a two-fold increase to reach almost two million barrels a day.
The numbers remained consistent throughout 2017, except for April that year.
Iran and Qatar co-own the world’s largest natural gas field, the offshore South Pars/North Dome. Iran’s territory covers 3,700 square kilometres in the Gulf.
France’s Total has invested in the natural gas market via the National Iranian Oil Company and is helping develop South Pars.
Iran produces about 880 million cubic metres of gas a day, and it is forecast to increase production to 1.2 billion cubic metres by 2021, Iranian financial publication Finance Tribune reports.