Saudi Arabia/Iran Update

Blog Post
3 January – Saudi officials said Shiite pilgrims would continue to be welcome. On the 4th, they reversed this announcement and closed Iran’s pilgrim’s affairs office in Jiddah. 
4 January – Bahrain followed the Saudi lead in giving Iranian diplomats 48 hours to leave. Sudan also broke diplomatic relations with Iran. The United Arab Emirates downgraded its representation to the level of the Charge’ D’affaires.
The head of Iran’s civil aviation organization said Saudi and Iranian airline flights might be canceled.
Russia reacts: 
(Pravda) “The situation in the Persian Gulf zone has deteriorated markedly in the last few days. While protesting against the execution in Saudi Arabia of the well-known Shi’i preacher Nimr Baqir al-Nimr, participants in a mass demonstration in Tehran broke into the compound of the Kingdom’s embassy, wrought physical damage to it, and were pushed out by law-enforcers. There was a similar incident involving the Saudi consulate-general in Mashhad. In response, the Kingdom of Saudi Arabia (KSA), and later Bahrain, decided to sever diplomatic relations with Iran.”
“We emphasize that attacks on foreign diplomatic missions cannot under any circumstances be regarded as a legitimate means of protest or expression of political views. We note the duty of host countries to ensure complete safety of the embassies and consulates accredited in their territory in accordance with well-known international conventions.”
“Moscow expresses serious concern at the additional rise in tensions in the Middle East with the involvement of major regional powers, Saudi Arabia and Iran, with both of which Russia maintains traditional friendly relations. We strongly urge Tehran and Riyadh, as well as other Persian Gulf states, to show restraint and avoid any steps complicating the situation and leading to greater tensions, including those between different denominations.”
“We are convinced that any difficulties and disagreements that arise in interstate relations can and must be overcome through dialogue, at the negotiating table. For its part, Russia will be ready to give necessary assistance to any such efforts. (emphasis added)”
China Reacts:

China expressed its concern that differences be settled through discussions in the interest of peace and stability. 
President Obama takes time out to formulate his (illegal)
executive order designed to go around Congress and put new
gun control measures in place.
USA Doesn’t React: 

Open sources reported no US offer to mediate. US mainstream media doesn’t comment on America’s failure to involve itself in what appears to be a looming war in the Middle East.
The Russian statement is an offer to help mediate the crisis. The Chinese statement backs the Russian offer. This crisis is on the verge of changing the strategic situation by propelling Russia into a potential leadership role even more prominent than the Syrian crisis has.
The Russians and Chinese seem to appreciate the potential for region-wide violent protests and provocations that is inherent in the Sunni-Shia confrontation. Two Sunni mosques were burned in Iraq on the 4th.
Shiite populations in the Gulf are angry and active. A Shiite uprising in Saudi Arabia’s Eastern Province, most of whose population is Shia, or in Bahrain, where the majority of the population is Shia, could topple the post-World War II strategic architecture which the US helped build and maintain. Instability in the Gulf states would have world-wide ripple effects, particularly in energy markets. Shiites have protested the Saudi execution of al-Nimr in nearly every country in which they reside.
The absence of US leadership in trying to settle this crisis and the behavior of the leaders involved indicate the old architecture is crumbling. New power arrangements may be emerging.

20 thoughts on “Saudi Arabia/Iran Update

  1. Nothing in the Middle East is any business of the US government or responsibility of the American tax payer. This mess is what we get for supporting the Saudis for so long. Bring all our troops home, end all aid to every other nation, mind our own business, problem solved.

  2. I am pondering how oil stocks will go, with all of this looming war business afoot.

    I went long on oil when it was around $50/barrel, and thought at the time it couldn't go much lower. I am now considering doubling down on going long on oil, with $36/barrel looking pretty good.

    Then again, North America pumps out a butt load of shale oil, does Saudi crude matter anymore on the world markets?

    What to do, what to do…..

  3. There's blood on the floors of Calgary right now and they're not expecting much improvement in '16. Well, that's tar sand, not shale…

  4. Thanks for the update — you'll note that Putin's going hard, unlike certain golfers that spring to mind.

  5. Part of me agrees. Part of me does not. If there were no nuclear weapons, we might be able to pull it off. Call ourselves an Island, refuse to trade with anyone and leave it at that. Announce that we have no allies. The third rock was big enough to do that once. It's not big anymore. America's wealth (including what wealth that you and I have) is the direct result of trade. And the trickle-down result of trade.

  6. Fredd- A lot of people were bullish on the price of oil soaring. The Saudis have always had the ability to set the price of oil based on their capacity. It's still true. Iran gets their revenue from oil. Both must pump oil to be in the fight. Both must get it to market. The Saudis are weaker than Iran in MANY ways and actually need to buy allies. That's what Trump was talking about when he suggested that they buy down the $19 trillion US debt in exchange for "protection". That might keep the Saudi oil flowing even stronger.

    The Russians need to pump oil. The Indonesians need to sell LNG. And it matters to us because they need to buy dollars since all oil is bought and sold in dollars.

    I think that forecasting oil prices requires reading the chicken bones very carefully. And I don't think that the price will climb much – but one nuclear weapon detonated in the Gulf can change that. Iran bought one or two from N. Korea so they have the weapon and they're working on the delivery system. The Saudis know this.

  7. LSP- Tar sand is dead for a while. Gas at the pumps has to be over $4.50 for tar sand to be viable. Not going there at the moment.

  8. Putin sees the opportunity.

    I think that Trump does too. None of the other GOP types think of it in terms of cash but that's how Trump is wired. Maybe four years of that would be good for the USA.

  9. It will be interesting to see how this affects US presence in the Kingdom of Bahrain. I will be waiting with bated breath.

  10. The Saudis and Iranians go to Bahrain and Dubai to drink and fornicate. If for no other reason, they will stay out of the fight and will remain protected in this dust-up. And I think that the P-3's and P-8's will continue to patrol the gulf from Bahrain.

  11. I think it is pretty disrespectful that the world is falling apart and outsiders are upset that Obie doesn't give up his vacation and golf outings to participate. The man needs his downtime. It is exhausting coming up with ways to circumvent congress, criminalize law abiding citizens while strengthening criminals, and further divide the country on race relations and income. I mean, he did take the time to sign the executive order that does nothing to actually protect any citizen. That is exhausting for him.

  12. He's trying to get as much down-time as possible to prepare for retirement and a move into his dotage.

  13. Between Obama, the DoD, and the Clinton State Department, policy was set to remove the US presence in the Mideast. I'm thinking that the destabilization was predicted and welcomed as a necessary part of "leading from behind." It may be connected with the desire to drive oil prices so high that the US is forced to stop driving cars. It may be connected with the idea that the US has no business "interfering" in the Mideast. It may a means of further globalizing the US by giving up power to weaker nations. What are your thoughts?

  14. The US could be energy independent in two years if somebody else led the country. I'm not sure what the game is. Hillary chastised Saudi Arabia and praised Iran today at one of her rants, while she wore her typical pear shaped clown costume.

  15. The exclamation point ! behind Jeb!'s name is now missing. It was originally put there to demonstrate how excited America was to have another Bush (the retarded son) running for president. Now it's just "Good old Jeb" – no Bush…in the hopes that we will forget and think that he's a "political outsider".

  16. Tell your friends that with the increasingly unstable world that America has created by withdrawing, and handing the reigns to Russia, that the demand for arms and ammunition will sky rocket. Alberta needs to diversify its industrial base. With Obama creating more demand for arms and ammo in the US, it's an easy export (see LSP Tears of a Clown post).

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