Friday 7 November 2014

Saudi Arabia, OPEC and giobal oil prices

"Saudis Have Good Reason To Be Concerned" Warns Ex-CIA Officer, As ISIS Enters World's Largest Oil Exporter




6 November, 2014



For the longest time there has been speculation whether Jihadist forces, be they ISIS, Nusra or other regional groups, had managed to spread beyond the Iraq conflict zone and infiltrate the world's oil mecca: Saudi Arabia. We now know the answer: according to Bloomberg, a Saudi citizen suspected of organizing the attack on Shiite worshipers in the oil-rich Eastern Province returned from fighting in Iraq and Syria, according to Saudi-owned newspapers. In short, ISIS has arrived in the world's largest oil exporter, which begs the question: was yesterday's news of an oil pipeline explosion, quickly downplayed by Saudi sources as "maintenance-related", in fact what most assumed at first, namely an act of sabotage? And how long until the next "planned maintenance" pipeline explosion?

According to Bloomberg, the citizen organized a cell that carried out the attack that killed seven people in the Shiite village of al-Dalwah after sneaking across the border into the kingdom, al-Hayat and Saudi Gazette newspapers said, citing security officials they didn’t identify. Asharq Al-Awsat said the Saudi fought in regional conflicts. The Interior Ministry declined to comment, citing the ongoing investigation.

This would be the first time that a Saudi returning from the latest conflicts in Iraq and Syria attacked targets in the world’s largest oil exporter, raising concern that sectarian violence may escalate. Saudi Arabia is participating in a U.S.- led military campaign against Islamic State, the al-Qaeda breakaway group that has seized large parts of Syria and Iraq and used social media to recruit Saudi men. In fact, with Saudi Arabia supporting the US campaign against ISIS, many wondered why has ISIS not retaliated yet, leading some to question the heritage of the Jihadist organization, and whether any amount of Saudi funding may be ebhind it.

The Saudis have good reason to be concerned, and the indications are that Saudi authorities are indeed concerned,” said Paul Pillar, a former intelligence officer for the Near East and South Asia at the Central Intelligence Agency. “This attack may herald other forms of violence within Saudi Arabia perpetrated by jihadists who had fought in Syria, Iraq, or elsewhere and are now returning home.”

The first confirmed attack by ISIS will hardly be the last: the leader of the cell was injured and arrested in clashes with security forces, al-Hayat reported. The cell included 22 members, 11 of whom had been imprisoned by Saudi authorities for “security” reasons, the London-based newspaper said.

Saudi authorities called the Nov. 3 shooting of the Shiites in the village a terrorist attack. Police detained 15 people and killed three suspects in raids across six cities, the official Saudi Press Agency reported. Two security personnel were killed during a raid in Buraidah in the central Qassim region, according to the news service.

Furthermore, as Site Intel reports, "Jihadists are mourning the death of two fighters" which guarantees more domestic violence in Saudi Arabia and it is only a matter of time before Saudi's oil production facilities are impaired.





The strike in the al-Ahsa oasis occurred at a ceremonial hall known as a Husseiniya during the Shiite religious celebration of Ashoura. Senior Sunni and Shiite religious scholars quickly condemned the attack as they seek to prevent sectarian tension in the Arab world’s biggest economy.
The kingdom’s Interior Minister Mohammed bin Nayef visited the families of the victims and the injured in al-Ahsa, where he conveyed King Abdullah’s condolences, the Saudi Press Agency reported. Sheikh Abdulaziz Al-Asheikh, the kingdom’s most senior Islamic scholar, said “sick minds” carried out this “brutal aggression.”

What, if any, is the strategy by the attackers:







If such attacks continue, “this is a very interesting tactic by the regime’s opponents,” said Gregory Gause, head of the International Affairs Department at Texas A&M University. “Target the Shiite, force the state to defend the Shiite and try to polarize more Sunni opinion against the state. I do not think it will work, but it is worth following.”


That, or perhaps one of the numerous oil exporting nations whose economies are getting crushed due to Saudi oil-price suppression tactics, will suddenly realize that the enemy of my enemy is my friend. And the last thing the US wants is to deal with an ISIS threat that has the behind the curtain support of some of the biggest global producers of oil.

Finally, for those who may have missed it, this article which we posted in May, shows a clip in which ISIS members declared their intent to bring jihad to Saudi Arabia.






WTI Crude Tumbles Under $78 As OPEC Slashes Growth & Demand Expectations



6 November, 2014

While it has been obvious to many that the drop in oil prices is a weak demand issue (amid a desperate over-supply pump for revenues in a decling growth world), talking-heads have remain unashamedly bullish of growthiness and shrugged at commodities dumping at the fastest pace since Lehman. However, it appears OPEC just burst that little bubble of hope by slashing demand forecasts. Crude prices tumbled on the admission.

OPEC's World Oil Outlook slashes GDP growth expectations from last year


With OECD demand tumbling



And the result...


 

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