Commodities, Emerging Markets, Energy, Frontier Markets

Will World Oil Prices Be Affected By Major U.S. Setback In Middle East?

By Dmitry Minin

The situation in the Middle East has aggravated recently. No doubt the things have gone bad for the United States, no matter this fact has been largely ignored by Western media. The further development of events may lead to drastic changes in the region giving an impetus to a new hike of oil prices.

According to DEBKAfile, an Israeli military intelligence website, Syrian rebel militia Al Yarmouk Shuhada Brigades, the most capable 2,000-strong anti-Assad force based in Jordan and areas adjacent to Syria, has abruptly joined up with the Islamic State in Iraq and Syria headed by al-Baghdadi.

Yarmouk is a special unit backed and trained for two years by US officers, mostly CIA experts, in Jordan, and supported by the Israeli army (Tsahal). The brigade has heavy armor vehicles in its inventory. It was supposed to be a forward deployed ground force advancing to Damascus from the south during a general offensive. The unit was known to be the most pro-Western force among the ranks of Syrian opposition. Now who can the Western coalition rely on in its «strange war» with the Islamic State? For almost two weeks Mousab Ali Qarfan, the commander of Yarmouk, was in direct talks with ISIS chief Abu Baqr Al-Baghdadi, who has recently relocated from Iraq to his northern Syrian headquarters at al-Raqqa. American special services failed to respond in another notable setback for the United States.

It may entail consequences of different kinds.

1. The turn of events puts an end to the myth about the United States support for some «democratic opposition» in Syria. Evidently one more step is taken by the forces aided by Washington on the way to joining the camp of those who are hostile to the United States.


2. The situation near the Syrian borders with Jordan and Israel has abruptly aggravated. The Islamic state becomes a predominant force there. Instead of moving to Damascus the Islamic State forces may move to the Golan Heights and Amman, the Jordanian capital.

3. The Islamic State advance may turn south in the direction of oil-rich Persian Gulf monarchies involving millions of young Arabs into the fight waged by Islamists.

4. Another Islamist Arab Spring may spiral out of US control to encompass Jordan and the Persian Gulf states.

5. There is a great probability that oil prices will bounce back to previous levels or even soar much higher than that. For instance, the leader of Al-Qaeda Osama bin Laden believed that $144 per barrel was a fair price. Al Baghdadi thinks the right price is $244.

 The Americans prepared the Islamic State for the fight against Syria. Now Jordan, the country looking stable from outside, may be the most vulnerable state on the way of Islamic State offensive. Its stability is misleading. 55% of Jordan’s population are Palestinians deprived of full rights. They can easily follow those who promise them to change their plight. The Bedouin tribes have always had it in their blood to support the Hashemite family. The less numerous Cherkessians or Chechnyans originate from the Caucasus have been guarding the safety of Hashemite sovereigns for a long time. But the loyalty of Bedouins to Jordan’s king Abdullah II has been questioned recently. Some tribes in the southern province of Maan known thanks to Tyrant, an American drama television series, already fly the black banners of Islamic State having become half independent. Cherkessians remain the only force fully loyal to the Hashemite dynasty; it’s not enough to guarantee that the royal family will stay in power.

First Lieutenant Muath al-Kasaesbeh, the pilot of Jordanian Air Force F-16 which came down on Dec. 24 over the northern Syrian town of Raqaa, was the first Arab pilot to be taken prisoner by the Islamic State.

Experts say that his fate may influence the Jordanian Bedouin’s sentiments. Some believe that Al Baghdadi may pardon the flier from punishment to win the sympathy of tribe leaders.

Mecca and Medina, the holy sites located in Saudi Arabia, remain to be the main targets for the new caliphate. Will the Saudi dynasty be able to repel the attack without the support of US military? Anyway Riyadh will have to allocate additional funds for emergency security measures and preserving the loyalty of people. In this case bringing oil prices down will no longer be the goal. To the contrary, the efforts will be applied to make the prices go up.

Perhaps Barack Obama jumped the gun when he announced himself to be the winner in the chess game with President Putin. The grand geopolitical chess board pattern offers a great choice of moves and combinations. Unlike in case of ordinary chess board, this pattern allows many pieces be inclined to choose their own moves with no orders given by master.

This article is courtesy of the Strategic Culture Foundation

The Strategic Culture Foundation provides a platform for exclusive analysis, research, and policy comment on Eurasian and global affairs and covers political, economic, social and security issues worldwide.  For more information, please visit

© Strategic Culture Foundation

About ETFalpha

Chief ETF Strategist & Co-Founder at EMerging Equity


2 thoughts on “Will World Oil Prices Be Affected By Major U.S. Setback In Middle East?

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