The ART Of Business

Are Russian and Saudi Oil Behind the Crisis in Iraq?

A low-key meeting on June 3 between the foreign ministers of Russia and Saudi Arabia has many wondering if the recent jihadist advances deep into Iraq now have the blessing of both countries.

For years, the two nations were at deep odds over continued Saudi support of radical Sunni movements across the Middle East and Caucuses.  

(It is a poorly held secret that wealthy Saudi citizens continue to finance al-Qaeda and its offshoots around the world- including the ISIS that is driving right now towards Baghdad; and, the terrorist groups which have attacked Russia on its home soil.)

Recently, however, rapprochement seems to have taken hold.

At the heart of this burgeoning harmony lies oil.

Last year, the Saudis offered to align with Russia to resolve the Syrian situation, in exchange for guarantees that the Winter Olympics in Sochi would be free from terrorist attacks. Also embedded in the Saudi offer was close cooperation on oil production and pricing.

As Russia’s economy continues to languish, due in large part to its invasion of Eastern Ukraine, one wonders if the Russians have finally gotten a change of heart.

It begs the question:

Who would benefit the most- at least in the short-term- from a serious disruption of the Iraqi oil supply, and the price spikes that are already threatening global energy markets?

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