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Update for January 28, 2014 - Newsletter (EU and Green Policies - Oil -4)

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  • Gerry Agnew
    For many years now, the State of Israel has been telling anybody who will listen that the Kingdom of Saudi Arabia is not for long in this world! Now, this does
    Message 1 of 1 , Jan 27, 2014
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      For many years now, the State of Israel has been telling anybody who will listen that the Kingdom of Saudi Arabia is not for long in this world! Now, this does not mean that someone (Iran?) is going to invade it and do all sorts of nasty nationalistic things with the still substantial amounts of Saudi oil which remains locked in its desert sands. The idea expressed by the think tanks in Tel Aviv is that the current rulers of Saudi Arabia are all quite elderly (to be polite about it) and that there doesn’t seem to be a clear line of succession when King Abdullah finally goes to meet his maker. As the country is comprised of desert tribes and so forth, it seems quite likely that the central authorities will be unable to contain them in the current political structure. We can also say that with huge numbers of unemployed youth (moderately high birth rates {Fertility Rate of 2.21 in 2013} do not help matters here when there is insufficient economy to attract their skills) which are absorbing more and more of the Saudi oil riches, that there is a built in instability factor.
       
       
       
      I also wonder about states such as Bahrain, Qatar, Kuwait and the like if “Big Brother” in Riyadh simply ceases to exist. What do they do for their security, implied or otherwise? Of more significance, given what the EU is looking at (let’s not forget that one!), what happens to their oil and gas production and the getting to market of these precious resources? I can recall in the Summer of 2013, in the midst of the Syrian crisis, that one of the reasons given for action against Syria was that Qatar had to have a stable area through Syria and Turkey to get a gas pipeline built to the EU. In view of the theory expressed by the Israelis, which I agree with when I follow the money – always a winner - I think this Qatari gas pipeline is a bunch of baloney, to be somewhat blunt about it. How can this be constructed when the entire Saudi peninsula is probably teetering on the brink of long term instability? It can’t is the obvious answer.
       
       
       
      So what is the US going do; it being the biggest security guarantor for the region? I believe that the number crunchers in Foggy Bottom have done their work and may have decided to write off the Saudis and their puppets in the area. They have to have a new rock to anchor themselves to and that is Iran! There is plenty of oil there and the only real problem seems to be trying to find ways to backtrack from the official ”Hate Iran” policy which has been in force since the Iran hostage problems back in 1980. Obama seems to be starting this with the current overture to Tehran on their nuclear programme, and now there is talk that Iran may be invited to assist in helping to stabilise Syria! Things are changing radically here, and it seems to me that there is probably a good (ie related to money) reason for all of this. Yes, there is and it is the continued availability of oil for the US economy. The US is saying loud and clear (well, at least moderately so) that the Saudis are yesterday’s news and that new thinking is required as the 21st Century progresses. We can say that such a rapprochement brings US strategic interests to the border of the old Soviet Union and the former Soviet republics in that area, but I think it is more a question of oil which the COMEX market (as already noted) is telling us is now of critical importance.
       
       
      Gerry
       
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