A U.S. Army soldier walks towards a burning oil well in Iraq`s vast southern Rumaila oilfields March 30, 2003. REUTERS
The rift between Saudi Arabia and Iran has quickly ballooned into the worst conflict in decades between the two countries.
The back-and-forth escalation quickly turned the simmering tension into an overt struggle for power in the Middle East. First, the execution of a prominent Shiite cleric prompted protestors to set fire to the Saudi embassy in Tehran. Saudi Arabia cut off diplomatic relations and kicked out Iranian diplomatic personnel. Tehran banned Saudi goods from entering Iran. Worst of all, Iran blames Saudi Arabia for an airstrike that landed near its embassy in Yemen.
Saudi Arabia’s Sunni allies in the Arabian Peninsula largely followed suit by downgrading diplomatic ties with Iran. However, recognizing the dire implications of a major conflict in the region, most of Saudi Arabia’s Gulf State allies did not go as far as to entirely sever diplomatic relations, as Saudi Arabia did. Bahrain, the one nation most closely allied with Riyadh, was the only one to take such a step.
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WNU Editor: A war between Saudi Arabia and Iran will send oil prices through the roof. And while this will bring great pain to the world's economies .... the boost in developing and marketing alternative energies, shale development, oil exploration at home .... all of this will also boom, and will probably in the long round bust our dependence on oil cartels like OPEC.
3 comments:
Not only would a war between these two ME rivals benefit Western oil companies like BP, Exxon Mobil, Shell, etc., but also defense giants like General Dynamics, Raytheon, Boeing, etc. not to mention countries like Russia and Venezuela...
Kinda makes ya wonder don't it?
In such a war, the major western oil companies would probably lose access to oil from the ME. As for the other companies, they might reap some benefit but the devestation that this situation would cause to a net oil importer like America would far outweigh this.
A non OPEC oil exporter would stand to benefit trmendously from a situation involving a war between Iran and Saudi Arabia. The US would likely be the biggest loser in such a situation.
WNU Editor,
The "glut" and low current price of oil is due to three key factors,
- Saudi overproduction, ( which may not be sustainable),
- "alternate" production from tar sands and shale oil who's growth in the past few years has exceeded Saudi oil production and has made the US a net exporter for the first time since the late '40's,
- no demand, other than China, global economic growth is negative, flat or anemic.
Other than panic and speculation, a Saudi- Iranian war would just take 1/4 of the worlds oil and gas off the market, which would mean maybe a barrel price in the high $60's.
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