The Volatile Middle East: Oil and Turmoil

Internal strife in the Middle East continues.

Jan 11, 2014 at 1:23PM

This article was written by -- the leading provider of energy news in the world

In recent history the Middle East has always been an area of turmoil, where wars came and went and conflicts were interrupted by long periods of stability and progress. That, regretfully, no longer seems to be the case.

Today the turmoil remains, and the stability that interjected itself between times of conflict, allowing people in this region to overcome the difficulties of political instability and open warfare, is becoming something of a rarity.

What is becoming apparent, however, is that with the end of the Cold War countries that previously played a major role in the region -- Egypt, Syria and Iraq -- are today pre-occupied with internal strife that is keeping them tied down. And those countries that have not experienced the humility of foreign occupation are looking over the castle walls to make sure no U.S. Marines are about to come calling, as the Saudis would have liked to happen in Syria.

And on the reverse side of the coin, countries that previously played little or no vital role in the region, or kept very low and discreet profiles, like Saudi Arabia, are becoming more vociferous, more brazen, and more active.

Another very active country is tiny Qatar, whose imprint on the Middle East and the world is far larger than the country itself thanks to its international satellite television network, al-Jazeera, a label that has become a household name in Europe, the Middle East and now North America.

Using their oil revenues, both Saudi Arabia and Qatar have invested tens of millions of dollars to promote, supply and sustain anti-government forces in Syria, hoping to overthrow the regime of President Bashar Assad. Indeed, Saudi Arabia has taken its gloves off, and is no longer trying to be diplomatic or discreet. It's time for the big guns, so to speak.

Saudi Arabia was banking on the United States, which had in the past stepped up to the plate to help its Saudi friends and is now less eager to send its men and women off to fight and die for Saudi royalty.

While there is little doubt that a regime as brutal as the one in place in Damascus should not remain in power, what is questionable is whether Saudi Arabia's policy is a smart one and whether it could backfire, spreading the conflict from the Levant to the oil-rich Gulf region, a region  that until now has been largely spared.

One quasi-certainty is that if the violence continues unchecked as it has in Syria, it is only a matter of time before it spreads. The entire region is sitting on a case of high explosives positioned on the edge of a dangerous precipice with a lit match inches away from the fuse.

The three largest countries in the region, Egypt, Syria and Iraq, traditionally the most influential, are each facing grave internal strife.  Egypt is in a state of utter confusion, with a transition government running the country while no one really knows what the future holds. In the past, Egypt was looked up to by other Arab countries. Syria, the other great center of political gravity in the Arab world, is now in its third year of a bloody war that has left the country completely devastated.

And Iraq, of course, is now falling into greater mayhem as al-Qaida sympathizers are challenging the government in Baghdad.

Lebanon, which had seen a brief period of some sort of pretend stability, is now once again finding itself on the verge of its 19-year civil war reigniting.

Just look at the map: Lebanon, Syria, Iraq, Egypt, Libya and Tunisia are all in very precarious states. Jordan and Palestine, although quiet for now, have large undercurrents of instability brewing that may explode at a moment's notice.

In Iraq, new clashes erupted Tuesday in the western part of the country between local tribesmen and al-Qaida militants who were trying to enter the city of Ramadi, forcing residents to blow up one of the bridges to slow down the rebel advance.

The entire Middle East is on the verge of unprecedented turmoil with no end in sight. Indeed, the frightening thought is what happens to the global economy if the fires of the Levant reach the oil fields of the Gulf?

The end of OPEC? 
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Related article: Prospects Grim for Libyan Oil Recovery

Related article: Oman and BP Finalize Gas Deal, Signaling Regional Change

Written by Claude Salhani at

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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