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ExposAsia No. 6/2011 - 15 March 2011
AN 'ARAB SPRING' OIL SHOCK?
Or a storm in a teacup?
By Jim Sillars
Last year we published Asianomics No 2/2010, The Arab Agony, written by an old friend, Jim Sillars. Jim is an ex-Member of Parliament in the UK and worked through the 1990s as the assistant secretary-general of the Arab-British Chamber of Commerce. He has had a long running association with many companies and organisations in the Middle East.
Following the events of the last few weeks we asked Jim if he could give us a clear-headed view of what is going on in the Arab world. Would more dominoes fall and is the threat to oil supplies – and therefore the oil price – real? ExposAsia No.6/2011, An ‘Arab Spring’ Oil Shock?’ addresses these issues and comes to the conclusion that the world is fretting over nothing. According to Jim, there is no danger that Saudi Arabia, the only producer that really matters, is going to succumb to the same turmoil that has engulfed Egypt, Libya and even Bahrain.
Over the last 24 hours Saudi has sent troops into Bahrain to subdue the uprising there. Jim sent these comments overnight:
“My article on page 4, dealing with Bahrain, Saudi and the US – concludes with my comment that the progressives will win. The fact that Saudi has sent in the troops – meaning that the Bahrain PM, Shaikh Kalifa bi Salman, is winning the debate inside the Khalifa family and that Saudi sees it essential to put a stopper on a Shia success – is a sign that conservative elements are retaining power. I think also, that with Saudi going in, which will not be a policy the Americans will like, it demonstrates that US policy is much weaker with its allies (Saudi and Israel) than was once the case.
There will ongoing tugs between the status quo and progress in Bahrain and between the US and its Saudi friends. I still think at the end of the day, the US will prevail.
I think the Saudis going in is, whilst quite legal given that they were invited in by the government, a major mistake but it doesn't alter the fact, indeed, reinforces it, that Saudi is not going to be a domino to fall.”
While all eyes have now turned to Japan it is important not to lose sight of other areas of tension in the global economy. This latest ExposAsia should help smooth nerves somewhat.
Please click on the following link to view a read-only sample of this report (available in pdf format to our Premium and Premium Plus subscribers).
AN 'ARAB SPRING' OIL SHOCK?
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