Brent crude oil futures have jumped to their highest since July 2015 in early trading Sunday evening, while U.S. WTI futures were also climbed to $55.82 a barrel following an eventful weekend in Middle East.
With Iran and Saudi Playing out a larger game, a lot of smaller scores were settled in the region with conclusive defeat of IS as a governing institution. While it still remains a force, the loss of all its territories would help restoration of some sort of order.
To a large extant the defeat of IS in Syria and Iraq is a victory for Iran, and not only because its friends in Damascus and Baghdad won but also because US managed to be an enemy of everyone in the region with its implicit support of Kurds. The possibility of Ankara working with Support of Tehran and in defiance of Washington is a stuff of dreams or the Shi’ite republic.
Iran won another victory in Lebanon where the Prime Miniter Saad al-Hariri stepped down from the safety of Saudi Arabia, virtually declaring surrender of his country to Hizbullah. While the chief of Hezbollah, Hassan Nasrallah, said it was a Saudi decision “imposed” on him it would make no sense for Saudi’s to remove a man from a power position who was so obviously allied to them.
But what really shook the market were the events in Saudi Arabia. Almost looking like an Arabic version of Game of thrones, 11 princes have been arrested, yet another one dead in an helicopter crash and almost all their loyal men and women in prison. In what seemed like a night of long knives in Riyadh, a ballistic missile was intercepted on its skies. Shortly after, loads of forces were mobilized only they were following orders from an internal corruption committee to arrest princes and their loyal officers. The purge continues as this piece is being written.
“Crown Prince Mohammad Bin Salman’s (MBS’) Saturday night purge represents a stunning political development in Saudi Arabia and a shot across the bow at the old establishment,” – CNBC reported. All the uncertainty has made the short-term and medium-term outlook for oil looks bullish.