CHINA could be on the brink of sparking complete financial warfare as it seeks closer relations with Iran at the expense of Saudi Arabia, experts have warned.
Beijing announced it would be deepening economic engagements with Iran by imposing 17 agreements for cooperation.
It comes just a week after international sanctions were lifted against the country causing oil to flood the markets.
In June 2014 oil was trading at more than $100 a barrel, in recent days it has dropped below $30 and some experts say it could go as low as $10.
The drop has led to increased tensions between Saudi Arabia, previously the world’s leading supplier of oil, and Iran.
Russia and America’s policy of fracking have also upped the amount of oil flooding the market, exacerbating the oversupply.
Xi Jinping during his visit to Tehran said the 17 agreements covered the areas of energy, trade and industry.
The two countries also agreed to increase bilateral trade which could amount to $600 billion over the next decade.
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