The cold war between Riyadh and Tehran has intensified amid allegations of an alleged Iranian plot to assassinate the Saudi ambassador in Washington.
Iran is suffering an economic squeeze because of sanctions imposed by the U.N. Security Council in June 2010 over Tehran's refusal to shut down its contentious nuclear program.
These are primarily targeted at Iran's all-important energy industry and badly needed foreign investment to upgrade oil fields and develop natural gas fields has been scared off by the sanctions, the toughest yet imposed on the Islamic Republic.
These have been strengthened by additional measures taken by the United States and the European Union.
The Saudis and Iranians are clashing in the Organization of Petroleum Exporting Countries. Riyadh favors boosting OPEC production to bring down prices to help consumer countries while Iran and other hawks want to push prices higher to boost revenue.
Whether Riyadh can sustain boosting production from 9.5 million barrels per day by 3 million bpd long enough to cause Iran trouble is questionable.
Given the tensions between Riyadh and Tehran, using the oil weapon to deprive Iran of vital revenue at such a critical time would be tantamount to a declaration of war.
That would in all probability push Tehran into trying to close the Strait of Hormuz, the only way in and out of the Persian Gulf and a vital oil artery, and would trigger a global economic crisis and possibly U.S. military intervention.
Iran's response to an oil war with the Saudis would probably be to stir up trouble with the Shiite majority in the kingdom's Eastern Province, its main oil production hub, a move Riyadh says it believes is already under way.
The oil weapon is one of several options open to Saudi Arabia should it choose to retaliate against Iran for the supposed assassination plot as well as other clandestine activities that are viewed by Riyadh with growing alarm.
Provoking a global panic by driving oil prices through the roof won't win Riyadh any friends and it's questionable that Saudi Arabia acting alone could bring Iran to its knees.
Another option for the Saudis as Iran supposedly seeks to develop nuclear weapons is to acquire its own nuclear arsenal, probably by buying the technology or actual warheads from Pakistan.
It's the only Muslim nuclear power and it's deeply indebted to the Saudis for financing much of its clandestine nuclear program in the 1980s and '90s.
Riyadh hasn't formally indicated what it plans to do, although this week's elevation of Saudi Interior Minister Prince Nayef to crown prince and heir to the throne if the aging and ailing King Abdallah dies, could offer a clue.
Nayef's a hard-line conservative, dedicated to the survival of the House of Saudi and a fierce opponent of Iran.
But in the meantime, comments made by another prominent Saudi royal, Prince Turki al-Faisal, at a closed-door meeting with U.S. and British military commanders on June 8 at the Molesworth British air force base near London, on how Riyadh views the confrontation with Iran are instructive.
The Wall Street Journal and Britain's Guardian newspaper both reported Turki warned that if Tehran didn't curtail its nuclear program, Riyadh will seek to cripple Iran's economy through its oil weapon.
He also said Riyadh could pursue nuclear weapons of its own, raising the specter of an intra-Muslim nuclear confrontation in the Middle East.
"Iran is very vulnerable in the oil sector and it is there that more could be done to squeeze the current government," Turki reportedly told the Molesworth gathering.
Iranian acquisition of nuclear arms, he said, "would compel Saudi Arabia … to pursue policies which could lead to untold and possibly dramatic consequences."
Turki, son of the late King Faisal, moves in the highest circles in Riyadh. He was head of Saudi Arabia's leading intelligence service, the General Intelligence Directorate, in 1977-2001 and was ambassador in Washington and London.
He currently has no formal government position but he's often used to float trial balloons regarding Saudi foreign policy.
Ohio crash that killed two caught on camera [VIDEO]
Video of Victoria’s Secret models trying to 'twerk' hits Instagram