The threat was aired by Prince Turki al-Faisal in a private meeting last month with American and British servicemen at a British airbase outside London.
The Wall Street Journal said last week it had gotten a copy of the remarks.
Turki, 66, has no formal government post at the moment. For a long time he headed the Saudi intelligence service and then became ambassador to Washington for a brief period.
The Journal said it reached Saudi officials who said Turki was speaking only as a private citizen. But others said Turki is often used to float policy ideas being discussed in the kingdom so officials can judge the foreign reaction. As such, what Turki was saying might best be viewed as a trial balloon rather than adopted policy.
Turki said, “Iran is very vulnerable in the oil sector, and it is there that more could be done to squeeze the current government.”
He said Iran’s “meddling and destabilizing efforts in countries with Shiite majorities, such as Iraq and Bahrain, as well as those countries with significant Shiite minorities … must come to an end.” He did not mention that Saudi Arabia has a significant Shiite minority.
“Saudi Arabia will oppose any and all of Iran’s actions in other countries because it is Saudi Arabia’s position that Iran has no right to meddle in other nations’ internal affairs,” Turki said.
He then said that Saudi Arabia could easily replace any oil lost to the market by reduced Iranian exports. To some it appeared he was trying to encourage foreign buyers of Iranian oil to boycott the Iranian product with the promise of making up the difference.
The United States stopped buying Iranian oil years ago, but Europe has never seriously discussed joining that boycott. But oil is fungible, so that if Europe stopped buying Iranian oil and bought Saudi oil instead, other countries such as China could just shift from Saudi to Iranian oil. To have serious stinging power, a boycott would have to be empowered by UN sanctions.
Saudi Arabia has been unwilling to confront Iran in the past. It has traditionally pursued a mellow foreign policy. But since the Arab spring began, it has noticeably shifted and is becoming assertive.
Instead of leaning heavily on Washington as it has done for decades, it has become very critical of Washington for its public support of democratic movements, especially those in Egypt and Bahrain, which it sees as potentially threatening to Saudi Arabia.
Four days after The Wall Street Journal published its story, Iranian Foreign Minister Ali-Akbar Salehi told reporters in Tehran there were no serious frictions between Iran and Saudi Arabia.
He said the only differences regard “certain regional developments” and have nothing to do with bilateral relations. “I have asked Saudi officials to negotiate with the Iranian authorities in order to remove the existing misunderstandings,” he said.