Coming Soon: Gulf War III?
4th January 2016
But is the tension entirely unwelcome to the Saudis? Goldman and others note that the Saudis are under considerably economic pressure because of low oil prices. Iranian oil coming on to the market soon will put more downward pressure on oil prices at least in the short term. What better way to prop up oil prices than to ramp up the political risk premium, which serves the interests of both Saudi Arabia and Iran. A new war in the Gulf would do wonders for oil prices. Farfetched perhaps, but stranger things happen in the Middle East. Everyone ought to regard the surface accounts of the media about what is going on with a great deal of suspicion.
We could do worse that a serious Sunni-Shi’ite war in the Gulf, as happened in the ’80s. American shale oil would start being profitable again, and the jihadis would have something closer to home to occupy their minds.