Wednesday, December 13, 2006

Connected? Saudis Step Back from OPEC Production Cuts & Additional U.S. Troops in Iraq

What connection could there be between 3 current events on today’s news? They all involve U.S. policy in the Middle East. Not long ago, Energy Secretary Samuel Bodman pleaded with OPEC to keep the oil market “fully supplied”. This seemed odd as oil producing nations have talked for months about oversupply. Today, OPEC’s President and Saudi Arabia pulled back from calls for production cuts.

The second came from President Bush’s brief press announcement at the Pentagon. He mentioned the possibility of U.S. troops moving outside Baghdad as Iraqi forces take greater control for the nation’s security. Near the end of his talk, the President dropped the bomb that could connect the other two, nation’s hostile to the U.S. will not be allowed to develop a nuclear weapon.

If America’s 51st state, Israel bombs Iran’s nuclear power facilities several predictable consequences would quickly follow. Oil supply would be dramatically reduced. The greater the supply exists at the time of the event, the less dramatic the market shock.

A reaction would likely occur in each country in the Middle East, regardless of who drops the bombs, the U.S. or Israel. If the Jewish state does the attacking, a more widespread reaction could be evidenced. Currently unstable Iraq might explode, especially given the Shia majority. Having U.S. troops in less populated areas would make sense from a damage control to the American military perspective.

Update: CNN just reported Bush is considering sending more troops to Iraq for a big security push. Might it be to secure Iraq's border with Iran post "not allowing the hostile regime to aquire nuclear weapons"?

No comments: