2014 July 03 Thursday
Obama About Face On Iraq: Oil Recession Worries

Obama initially rejected sending troops to Iraq after ISIS/ISIL went on a tear thru northern Iraq but since then has been taking a series of steps to give the US a bigger and bigger military role in Iraq.

June 14: Obama says no US troops to Iraq. In the latest escalation of the US response on July 3 US Defense Secretary Chuck Hagel said Green Berets are headed for Erbil in the Kurdish zone.

Why? My guess: To protect oil production. Suppose the Sunni Jihadists got into southern Iraq and seriously disrupted oil production. What would happen? Skyrocketing global oil prices and a recession. Almost all US recessions since World War II have been preceded by an oil price shock.

Jihadists can mess up Syria and get less attention from Washington DC because Syria has hardly any oil. But in Iraq the Kurds and the Shia Arabs have oil. The oil must flow!

What I want to know: Will the Shias in the oil region of Saudi Arabia ever rebel? That would cause a deep world recession.

Share |      By Randall Parker at 2014 July 03 11:31 PM  China Economy


Comments
Wolf-Dog said at July 4, 2014 9:32 PM:

Ultimately Jihadists will come to power in Saudi Arabia and other oil producing Sunni states. It's hard to predict when, but in a few decades this will be very likely because the feudal systems that are in place in these countries are resented by the majority. Unless the western world starts a major research program for alternative energy as soon as possible, the outcome will be cataclysmic.

bob sykes said at July 5, 2014 5:36 AM:

The oil regions in Kuwait and Saudi Arabia are Shia, and when the revolutions come they will be Shia, too. How they align with Iran is hard to say. There is still the Arab/Persian conflict. The Shia Arabs of southern Iraq have mixed feelings about Iranian influence in their country. Tribalism is, after all, the foundation of Middle Eastern societies.


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