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Saudi Arabia says it will stop cutting oil production to meet sanctions

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Saudi Arabia has said it will not reduce oil output to meet its $150 billion (£85 billion) economic sanctions against Iran, after a United Nations panel said the move risked creating “an existential threat” to the region.

Saudi Arabia said in a statement on Wednesday it would “temporarily halt” all its oil production, including in the U.S. Gulf Coast, as part of a $150bn deal signed last week.

The move comes as the United Nations nuclear watchdog has called on Iran to curb its nuclear programme in exchange for a lifting of Western economic sanctions.

Saudi Arabia’s foreign minister, Adel al-Jubeir, said on Wednesday that he would sign the deal, which was signed by the head of the kingdom’s petroleum ministry, Khalid al-Falih.

It will be implemented on Friday, he said.

The deal was struck between Saudi Arabia, the United Arab Emirates, Bahrain and Egypt and includes an extension of an existing ban on exports of oil to Iran.

Iran said it was shocked by the announcement, which is the latest in a series of moves aimed at pressuring Tehran to change its policies in the region and reduce its nuclear ambitions.

“The government of the Kingdom of Saudi Arabia will not allow Iran to create a situation in which its national security is endangered by the lifting of sanctions,” Iran’s foreign ministry said in an online statement.

Iran has also accused Saudi Arabia of trying to force it to back away from the nuclear deal by threatening sanctions.

Iran has long accused the kingdom of trying, and failing, to force the lifting.

Al-Falohih said Saudi Arabia would not be able to “change the sanctions regime and the economic blockade that has been imposed against the country”.

“The Saudi Arabian government is committed to achieving a permanent solution that can guarantee the safety and security of the Saudi people and ensure that Saudi Arabia’s economy will not suffer a similar financial crisis as the situation that prevailed in Iran during the 1980s,” he said in the statement.

The United States, the European Union and China, the world’s largest oil exporter, have imposed economic sanctions on Iran in an attempt to force Tehran to reverse its nuclear-related sanctions.

The sanctions have led to a dramatic drop in oil prices and forced the kingdom to import more oil from Saudi Arabia.

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