A beheading in Saudi Arabia and oil

Posted: January 4, 2016 in Uncategorized

Saudi Arabia successfully inflamed the already inflamed Middle East with the beheading of a prominent Shia cleric (Shia are mainly Iranians).

Immediately oil (brent) went up 2.25%.

This is not a trend inversion, but goes to show how oil at these prices is actually quite interesting and an essential ingredient of your asset allocation!

Apart the words Iran made it clear it does not want to escalate it to a full war – but it also clear that there will be no settlements in the proxy wars (Syria and Yemen)…actually quite possible some further escalation is almost granted.

This is a way of the Saudi messaging to Iran (and Turkey) that they are a contender for the title of Middle East Superpower.

And this is just what happens when the US decide to step back and avoid a political intervention (similar politics has been adopted in 1933 versus…Hitler’s Germany).

This beheading will just put more fuel on the fire in this conflict which will continue to simmer for a while (well even for Germany it took 6 years. Technically speaking 1933 should be equal to 2015).

By the way some not so funny data from the Saudi Kingdom.

In 2015 Saudi decapitated more than double the amount decapitated by IS.

Saudi Arabia is leading the UN Human Rights Council….(yes it’s true!)

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