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The Saudi Succession: Its Impact On Oil, Markets And Politics

Tyler Durden's picture




 

As reported earlier, several hours ago Saudi Arabia announced that its 91-year-old King Abdullah had passed away, in the process setting off what may be a fascinating, and problematic, Saudi succession fight which impacts everything from oil, to markets to geopolitics, especially in the aftermath of the dramatic political coup in neighboring Yemen. As a reminder, it is Saudi Arabia whose insistence on not cutting oil production with the intent of hobbling the US shale industry has led to the splinter of OPEC, and to a Brent price south of $50. Which is why today's event and its implications will be analyzed under a microscope by everyone: from politicians to energy traders.

Here, courtesy of Ecstrat's Emad Mostaque, is an initial take at succession, the likely impact on oil, then the Saudi market & currency and finally regional politics.

Succession

The process of succession appears to have run smoothly with Prince Salman (79), Abdullah’s half-brother, being announced king and another half-brother and the youngest of his generation (at 69) Prince Muqrin being anointed the new Crown Prince as expected. King Salman has significant financial and power backing as one of 7 sons of Hassa al Sudairi (known as the “Sudairi Seven”) and King Abdulaziz and as such is unlikely to be challenged. Salman is commonly known for his charitable giving and conservative nature, please contact us for other details.

While Salman has the ability to change succession (indeed under Saudi Basic Law and given his family backing he has the power to do anything he wishes), it is likely that Muqrin will remain the next in line. After this, it will skip a generation, with the two main candidates for the throne still the defense minister Mohammad bin Nayef (55), the son of Salman’s full brother departed Crown Prince Nayef and head of the National Guard Mutaib (62), son of Abdullah. As with the announcement of Prince Muqrin as Deputy Crown Prince, we may see an announcement in this regard sooner rather than later to assuage fears of potential rapid succession, although we are in a period where any agreements made under King Abdullah’s reign may be put to the test

Oil

With oil prices under $50, the feeling on the ground in Saudi Arabia has been one of concern. After 19 years with of rule by Abdullah (9 as regent and 10 as King), there is significant pressure for the new King to secure the support of the populace through populist measures such as public sector wage increases with  90% of Saudis employed in the public sector (90% of the private sector is foreign) and additional handouts. These may well include expensive measures such as free housing for young married couples and a potential consumer debt jubilee, where the government takes over payments (billions have already been shifted in this manner over the last few years).

The current Saudi budget balances at around $63 (see here: http://www.ecstrat.com/research/balancing-budgets/)  and the Kingdom has ample cash assets of around $800bn and the ability to raise huge amounts of debt. It should also be noted that while the budget balances in the $60s, historical spending has been significantly above budget in the last few years, $30bn in excess in 2014. Additional spending may be similar to the Arab Spring, meaning we could see an overspend of $50bn or more this year depending on the measures taken.

Saudi Arabian rhetoric has been firmly guiding the oil price down since the OPEC meeting, with officials pointing out quite sensibly that it is up the market to set prices and not for Saudi to underwrite unconventional oil producers. I discussed why this made the market particularly vulnerable here: http://bit.ly/ecstrat4 and was one of the key reasons I was negative on oil prices (although I did see $70 as a floor as I thought OPEC would cut!).

In reality, rhetoric is about all Saudi has been doing to impact oil prices, with the latest figures for production and exports actually down 300kbpd YoY and price differentials to the US down versus the summer, but still at multi-year highs.

From comments at the WEF in Davos, the rhetoric is already calming with guidance that oil prices should correct over the next year, albeit not too high and moves to focus on the long-term potential for oil prices as unconventional sources come under continued pressure would increase local sentiment and potentially boost the oil price given the current structure.

The current structure of the oil curve is hugely overextended, with almost a 20% spread between 1m and 12m WTI, a scenario that is truly bizarre in a world of negative nominal Eurozone yields. To put this in context, this has only occurred twice in the last few decades, at which time storage was more expensive and interest rates much higher. Oil doubled in the following year both times.

This is also a key reason that inventories at Cushing are spiking and the Brent-WTI spread closed (as WTI is easy to store there), giving a false signal of oversupply when in fact demand figures are likely to be significantly higher (1.5-2mbpd by my estimation) over the last period than the market expects. In addition, 40mb of floating storage have been hired to take advantage of this arbitrage, further reducing the probability of it continuing.

The back end of the curve is where the real story is, having disconnected completely from spot oil prices in terms of correlation as it remains near $80. The super-contango we see now could continue for a period due to some curious structural details, but it is likely that into 2016 we will see a resumption of backwardation, with the spot price above the backend price, which will be higher due to the E of E&P being slashed.

In the medium term, there are several geopolitical events that the oil market may also respond to given the heavy net shorts, from the complex situation in Yemen, where Shia Houthis have ousted Saudi ally Hadi to impending violence in Nigeria, which typically loses 300kbpd of production during elections (due for Valentine’s day), with 1,000 dying in the violence last time around and likely many more this year given the sharp divisions that exist within the country (more here: http://bit.ly/ecstrat7). Libya remains a wreck with reconciliation unlikely absent a significant external force intervening and Iraq is coming under heavy pressure as it looks to run a 20-30% deficit due to lower oil prices.

On the flipside, we are likely ~2 months away from an Iran deal, which would cause the market to price in additional supply coming online rapidly.

Market length is resolutely short, having flipped hard from a record long position last summer and the possibility of a near-term squeeze is high, particularly as crude has consolidated just under $50. In the medium term the likely economic and “fundamental” news may cause the rally to fade, but the long-term outlook remains strong and I retain my view oil will be $130 in a few years absent China blowing up completely

Market & currency

The Tadawul has proved remarkably resilient in the face of lower oil prices – down just 4% over the last 12 months even as oil fell 55%. If you had put that scenario to any market observer a year ago, the likely response would have been that we would be 30-40% lower at least.

This increased resilience may have been aided by a patriotic hand, but the lack of significant downgrades in earnings are also indicative of the fact that the Saudi market may be driven by spending based on oil, but most stocks, petchems aside, aren’t beta to oil as in other markets. Even petchems run with fixed, below market price feedstock prices, meaning they are consistently profitable even at current levels of oil, although the offshore operations of companies such as SABIC do add an element of beta to oil.

The overall impact of the succession is likely to be positive for the Tadawul as wealth transfer to the populace is increased and spending maintained over the next few years no matter what the oil price is. Retail participation in the Saudi stock exchange remains above 90% as it trades billions of dollars each day as it remains one of the main sources of entertainment in the kingdom. It would not be surprising to see some favourable privatizations be introduced ahead of the market opening to foreigners in a few months to fulfil its other main role of wealth redistribution, with retail IPO participation remarkably high.

Credit conditions are likely to be loosed over the coming year to fill some of the gap from lower oil revenues and after banks were disintermediated in the spending boom following the Arab Spring. Capital adequacy ratios remain high with Tier 1 ratios in the teens and asset quality remains high, particularly as the government is likely to continue spending. This should increase overall monetary velocity and potentially stoke inflation, which should increase asset prices. We can also expect a focus on mortgage lending as part of the new policies, particularly to young Saudis. Given this is in effect lending to the government given the high level of public sector employment, this could expand faster than many have figured. It is also likely that the transition to an Islamic economy will be accelerated, building on the NCB experience..

As such, the trade is to buy retail-heavy Islamic banks, which also benefit from higher US interest rates due to their significant zero-cost deposits, leading to rapidly expanding NIMs, retail names, which although expensive match up well to EM peers and will benefit from increased discretionary spending power and real estate stocks, which will benefit from general asset inflation (which should also cause the Saudi market to rerate further despite current oil prices as monetary velocity picks up).

The downside appears limited here as it is difficult to see a scenario where the government wouldn’t step in should retail confidence be lost.

On the Saudi Rial, there has been interesting activity on forwards as a devaluation of the currency would be a quick and easy way to fix any budget issues, much as Russia has done in maintaining the Ruble oil price, hurting importers and consumers. In Saudi the elasticity of demand and ability to withstand inflation is very different to Russia, but it is likely that we would see other Gulf states move first to devalue, with Bahrain and Oman (where succession is not quite so clear cut per my recent note) prime candidates. The first stage is likely to be a move to a Kuwait Dinar-style basket, particularly given increase exports to Asia and the decreasing importance of US crude flows, but any move in this regard from Saudi is unlikely in the next 6 months as they look to stabilize things, but this will grow more likely the longer oil prices stay low.

We may see some debt issuance however to bridge near-term spending spikes, a key measure to developing a yield curve as part of the package of reforms I have suggested Gulf countries should carry out to take advantage of low oil prices here: http://blogs.ft.com/beyond-brics/2015/01/06/guest-post-the-gulf-must-take-advantage-of-low-oil-prices/

Regional geopolitics

The order of the day is stability after a tumultuous few years.

To the north there is the threat of ISIS, but significant strides seem to have been made in patching Iraq-Saudi relations under the rule of new PM Abadi after a somewhat tense relationship with Maliki. Iran looks to be coming out from the cold with Obama actively pushing for a peace deal and increasingly looking like he will accept Assad as an alternative to ISIS, but despite the historical acrimony, the interests of Iran and Saudi Arabia are somewhat more in alignment now than in previous years.

The key exception to this is Yemen, which is a terribly strange situation, but one in where the Shia Houthis (known as “fiver” Shias, closer to Sunnis than the “twelver” Iranians/Iraqis and more a tribe than religious group) who Saudi Arabia has fought for a number of years in north Yemen, have now effectively taken over with President Hadi resigning. Curiously the Houthis are the tribe of former President Saleh and virulently anti al-Qaeda, but it is quite a change on the southern border of Saudi Arabia.

Elsewhere the Arab Spring has turned into an Arab Winter with the challenge of Islamist groups soundly defeated, even if some more virulent forms have popped up but are now largely contained.

It is likely that Saudi may well pursue a less aggressive foreign policy in the near-term as it focuses on internal matters, particularly after certain initiatives did not work out quite as planned.

In conclusion the succession in Saudi Arabia may prove a filip to oil prices in the near-term, even if the medium term outlook looks challenging and should be overall positive for a market used as a barometer for popular feeling. We should expect the focus to be on internal consolidation versus external expansion, but the way that they treat the developing situation in Yemen should provide strong guidance to how foreign policy will be in the future.

 

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Thu, 01/22/2015 - 22:37 | 5694892 Soul Glow
Soul Glow's picture

Impact, bitchez!

Thu, 01/22/2015 - 22:38 | 5694894 Publicus
Publicus's picture

The human race moves forward one death at a time.

Thu, 01/22/2015 - 22:43 | 5694914 SWRichmond
SWRichmond's picture

holy fucking shit

Thu, 01/22/2015 - 22:54 | 5694949 johngaltfla
johngaltfla's picture

Here is what we can expect in February to help WTI Crude reach the $60 per BBL in the weeks ahead:

With the Death of the Saudi King, a US Invasion of Yemen is only Weeks Away

Thu, 01/22/2015 - 23:01 | 5694956 smukster
smukster's picture

If there is a real struggle for his succession, we're not talking 60$ but 100.

Remember this is the guy who invented the petrodollar.

Thu, 01/22/2015 - 23:07 | 5694994 johngaltfla
johngaltfla's picture

There is no struggle. The current King is a figure head only. Crown Prince Muqrin is the real power and he is much more disposed to using military force to execute the will of the House of Saud. Iran and Russia are about to get some blowback for the Houthi overthrow of the Yemeni government and Obama will be ordered to conduct a WAR FOR OIL PRICES or face dire retribution from the Saudis. We will have over 5,000 troops in the region by next week (see the link above) and with GCC/Saudi airpower in addition to our own, the nation of Yemen will basically become a Saudi province.

Fri, 01/23/2015 - 00:10 | 5695166 samjam7
samjam7's picture

Not that the US didn't have its dirty past with Al-Kaida, but just theoretically, wouldn't it be great to unite with the Houthis to smash Osama's disciples and Paris-attack-organizers once and for all? Who knows they may bring more stability to the country than some Saudi puppet....

And it could be used as a joker with Iran too in the negotiations with their nukes....oh well, I guess in a good world it would be like this. In the world we're in it's more likely that Obama will bow over in front of the Sauds and yell "demand masters"!

Fri, 01/23/2015 - 00:12 | 5695184 smukster
smukster's picture

Yes you could. You would have to changes sides NOW, ally with Iran and fight the Saudis. Israel is up for that.

Fri, 01/23/2015 - 00:25 | 5695230 samjam7
samjam7's picture

Just imagine that happening...joint US/Israeli Military moving in on Ryyadh over night! :D 
You'd better fill your gas tank NOW too.... 

Fri, 01/23/2015 - 11:21 | 5696619 Utah_Get_Me_2
Utah_Get_Me_2's picture

http://www.amazon.com/The-Star-Sword-Wayne-Madsen/dp/1312459328

Apparently you are unfamiliar with Wayne Madsen and geo-politics in general.

Fri, 01/23/2015 - 00:12 | 5695177 smukster
smukster's picture

Invasion in Yemen spells WW3. Iran and China will not sit still.

Fri, 01/23/2015 - 02:06 | 5695394 MeBizarro
MeBizarro's picture

Completely wrong.  It is a dry rock with almost no economic with a burdening and severly undereducated young population.  

Fri, 01/23/2015 - 00:27 | 5695228 DaveyJones
DaveyJones's picture

why not, we've been conducting war for oil prices for some time now..

even on our own people...

and their legal documents

Fri, 01/23/2015 - 00:39 | 5695270 KuriousKat
KuriousKat's picture

The Isis have killed over 500 Iranian officers. Lesson learned.  Iran wants influence not another Vietnam or Afghanistan like the Russians.  Al Qaeda factions or parts if its franchise have joined or backed Isis, which gets its main  strength through nearly 20 percent of the Iraqi populations..who are Sunni and volunteers from Syria, pakistan, etc....I see Isis back Alqaeda in Yemen. The Houthis were not Anti American at least up until the point we started crashing wedding parties and farmers  with our drones. I feel sorry for the Houthis, who like the aliwites faced extinction at the hands of Sunnis, who consider themselves the one true religion. They will be annihilated as you show..by AQ Isis and US ..unless some new arrangement or event develops.. The US will not give up its port anymore than the Russians will give up its naval port in Syria.. We are dead set in staying there whether the Saudis or yemenis like it or not, and much more productive if they liked., irrespective of who is in charge.. or  would not be conducting special ops in over 109 nations out of 190 nations on earth otherwise to make sure it stays that way.... See latest Tom Dispatch. I am curious why Saudis if Saudis want to expand they are building a maginot line which, imo,  will fail It looks more like containment...Arabs, never lacking Intrigue...Do Turkey and Qatar, the latter very quiet as of late..have preferences or favorite horses..  in this line of succession..I would like your insight.

Thank you

Fri, 01/23/2015 - 02:37 | 5695356 EscapingProgress
EscapingProgress's picture

"Elsewhere the Arab Spring has turned into an Arab Winter with the challenge of Islamist groups soundly defeated, even if some more virulent forms have popped up but are now largely contained."

This guy doesn't know what he's talking about...

...but this guy does...

globalguerrillas.typepad.com/globalguerrillas/2015/01/saudi-arabia-on-the-edge-of-an-abyss.html

"ISIS sent a suicide team across the border into Saudi Arabia. ... The team found and killed the Saudi general (Oudah al-Belawi) in charge of the country's nothern border zone at the outpost he was visiting..."

http://globalguerrillas.typepad.com/globalguerrillas/2015/01/abdullah-is...

"Saudi Arabia has been pumping oil like crazy to drive the price of oil down.  It worked.  Prices dropped.  Lower oil prices are undercuting the funding ISIS gets from its illicit oil sales across the region. Given time, the Saudis believed that this reduction in funding from oil sales would eventually force ISIS to approach Saudi Arabia for financial support.  When it did ask for financial help, the Kingdom would be able to gain the leverage necessary to neutralize the threat it posed (as it did with al Qaeda decades earlier).  Needless to say, this gambit didn't work.  ISIS proved much more resilient financially than al Qaeda and other non-state groups are.  ISIS has many, many more sources of income than donations from sympathisers and oil sales.

...

The failure of this gambit means that with the death of the King, ISIS may have a golden opportunity to pivot south to take Mecca and Medina.  A southern pivot would capitalize on the increased fragility (of an already fragile country) caused by the succession.  It would also allow ISIS to continue the its impressive string of victories in the field.  However, this won't be a conventional war.  It's going to be an open source war to win a moral victory.  Here's a taste for how they would do it:

ISIS would pivot forces from Syria and Iraq for a push south (indications are that this is apparently already underway), and then use these forces to rapidly overwhelm numerous border posts to create widespread confusion within the Saudi security forces.  If done correctly, the rapid advances of black flags will cause a mass rout that will yield significant equipment and a considerable number of new jihadis (as troops flip to join the ISIS jihad).  Simultaneous with the drive south, cells of ISIS jihadis and lone sympathizers will activate across the Kingdom, causing disruption and confusion.  With this, lines of authority and communication within the kingdom will begin to break down. The advancing jihad will connect with local forces along a massive front moving south, jumping from city to city.  The speed of this will depend on how willing the population is to accept ISIS.  However, since Saudi Arabia has already indoctrinated its population with a religious ideology that is sympathetic to ISIS, the speed of the advance may be very rapid."

When the black flag flies over Riyadh, what will oil prices be? Will they give us a good deal since we armed and trained them?

I made a statement on ZH a month or so ago in which I claimed the battle in Kobani was a diversion and that Baghdad was the real prize. I now believe that I was mistaken. Kobani and Baghdad are sideshows. They will go for Mecca and Medina.

Fri, 01/23/2015 - 03:24 | 5695487 Soul Glow
Soul Glow's picture

ISIS isn't in the oil selling business they are in the looting business.  The decrease in oil prices have not slumped ISIS's ability to garner income, they rob banks and there are still plenty of banks to rob.

Fri, 01/23/2015 - 11:42 | 5696720 TruthHunter
TruthHunter's picture

As I understand it, there were a number of small scale refinery operations in the area

taken over by ISIS. The tribes depended on these for income. After ISIS took over these

were all put out of production.  Much of the northern extraction is in Kurdish areas.

Crude may still be flowing south to the Gulf from ISIS areas,

but I doubt it. If it is, its Tin Foil Hat time.  So where would much income from

oil be benefiting ISIS?

Thu, 01/22/2015 - 23:12 | 5695003 SWRichmond
SWRichmond's picture

It's contained.

Thu, 01/22/2015 - 23:33 | 5695051 tip e. canoe
tip e. canoe's picture

just like those fracked wells.

Thu, 01/22/2015 - 23:55 | 5695135 jeff montanye
jeff montanye's picture

with the u.s. state dept and related security agencies involved, and the house of saud reliably zionist, confidence of a successful succession runs high.  libya and iraq, syria and yemen are all cautionary tales to heed.

would that the architects of u.s. foreign policy could someday get what they deserve. 

Fri, 01/23/2015 - 03:25 | 5695489 Soul Glow
Soul Glow's picture

We fracked some folks.

Fri, 01/23/2015 - 09:45 | 5696109 Clashfan
Clashfan's picture

No, this is Abdullah. Fahd died back in what, 05? Invented the petrodollar? Um, no sir.

Thu, 01/22/2015 - 23:51 | 5695117 Chad_the_short_...
Chad_the_short_seller's picture

When is George Soros going to die so I can buy a $500 bottle of champaign and celebrate?

Thu, 01/22/2015 - 22:47 | 5694923 Bloppy
Bloppy's picture

this is going to turn into a big f-ing mess really fast - Obama will be in over his head almost immediately

Thu, 01/22/2015 - 23:06 | 5694986 SWRichmond
SWRichmond's picture

Exactly

4 and 20 black swans baked in a pie for the boys in Davos

Thu, 01/22/2015 - 23:40 | 5695090 pipes
pipes's picture

Interestingly and conveniently timed, eh?

Thu, 01/22/2015 - 23:49 | 5695115 SWRichmond
SWRichmond's picture

Chaos lord 10

Control freaks 0

Fri, 01/23/2015 - 00:13 | 5695185 bid the soldier...
bid the soldiers shoot's picture

 

How much more over his head can he get?

Fri, 01/23/2015 - 00:34 | 5695261 forwardho
forwardho's picture

Been breathing through a hollow reed for over six years.

Fri, 01/23/2015 - 01:20 | 5695342 bid the soldier...
bid the soldiers shoot's picture

 

and standing on Michelle's shoulders

Fri, 01/23/2015 - 02:45 | 5695442 me again
me again's picture

Obama is not going to be in over his head. Wake up, for Christs Sake. He just gets his orders from his owners. He doesn't have any head.

Thu, 01/22/2015 - 23:35 | 5695061 km4
km4's picture

Abdullah is Dead. ISIS has an opportunity to flip the Kingdom. Here's how

http://globalguerrillas.typepad.com/globalguerrillas/2015/01/abdullah-is...

Fri, 01/23/2015 - 11:10 | 5696572 roadhazard
roadhazard's picture

I call BS on ISIS "pivot" to Saudi Arabia. Those clowns can't lift there head up without getting it blown off. The Kurds can beat ISIS and are proving it.

Fri, 01/23/2015 - 03:54 | 5695530 polocko
polocko's picture

There is no impact. The stupidity is astounding right now. You think these dictators give a rats ass about any world philosophy, or what logical or civilized people think. 

This has been passed up and down by the inside family. They will all do what they are told and tow the line. World politics have no influence on them. They are completely out for themselves. Does not matter who died.

This is the perfect short on this bounce and cover for a quick profit. Free money

 

 

Thu, 01/22/2015 - 22:44 | 5694916 Diablo
Diablo's picture

My condolences to the Bush's on their loss. 

 

Thu, 01/22/2015 - 22:52 | 5694946 Chupacabra-322
Chupacabra-322's picture

The real 911 False Flag Crimianl at large is & will always be Prince Bandar.
Those "Classified" 28 will soon be declassified & when that occurs all hell is going to break loose.

Since the early days after the Sept. 11 attacks, when news emerged that most of the airline hijackers came from Saudi Arabia, dark allegations have lingered about official Saudi ties to the terrorists.

Fueling the suspicions: 28 still-classified pages in a congressional inquiry on 9/11 that raise questions about Saudi financial support to the hijackers in the United States prior to the attacks.

Both the administrations of George W. Bush and Barack Obama have refused to declassify the pages on grounds of national security. But critics, including members of Congress who have read the pages in the tightly guarded, underground room in the Capitol where they are held, say national security has nothing to do with it. U.S. officials, they charge, are trying to hide the double game that Saudi Arabia has long played with Washington, as both a close ally and petri dish for the world’s most toxic brand of Islamic extremism.

Thu, 01/22/2015 - 22:57 | 5694960 TeamDepends
TeamDepends's picture

Pull it!!!!

Thu, 01/22/2015 - 23:01 | 5694974 Chupacabra-322
Chupacabra-322's picture

Pull my finger.

Thu, 01/22/2015 - 23:34 | 5695056 tip e. canoe
tip e. canoe's picture

pull me leg.

Thu, 01/22/2015 - 23:54 | 5695125 Bunghole
Bunghole's picture

The beheadings will continue until morale improves.

Fri, 01/23/2015 - 02:30 | 5695425 Charming Anarchist
Charming Anarchist's picture

Exactly!!

Next, we will be fed some bullshit narrative that BushCheney was blackmailed by Bandar and therefore, we should not hold them culpable for their actions. 

 

<<pull me leg.>>

Thu, 01/22/2015 - 23:16 | 5695010 cherry picker
cherry picker's picture

You are right.  The administration also made sure some were able to fly out of the country, with everything that was going on at the time you would think that would have been at the bottom of their priority list.

I don't expect to see justice for all these things in my life time or the truth. 

Thu, 01/22/2015 - 23:36 | 5695071 pipes
pipes's picture

Layers of an onion.

 

Saudi connection and participation?...Could be...sure...

 

But not likely the originator of this crime.

 

Why not them?

 

Because we have sufficient information to think it was them.

 

Classic misdirection.

Thu, 01/22/2015 - 23:43 | 5695101 tip e. canoe
tip e. canoe's picture

information that has recently dripped out through the MSM filter.

+1

Fri, 01/23/2015 - 00:28 | 5695241 Chad_the_short_...
Chad_the_short_seller's picture

Two things that stand out to me the most in the 911 false flag.

1. The dancing israelis with explosives videotaping the 911 attacks and celebrating when the buildings crumbled. How fucking disgusting that we allowed that fucking shit. And then the jew in the justice department in NY freed them.

2. All the puts that were bought on all the airlines. It was an insanely unbelievable amount being bought the entire week before 911. It's so easy to trace those back to who bought them. How can you not?

 

 

Fri, 01/23/2015 - 01:53 | 5695381 r0mulus
r0mulus's picture

...likely to be revealed when a political excuse is needed to invade saudi arabia for the purpose of securing their oil supplies for "democracy and freedom".

Fri, 01/23/2015 - 00:37 | 5695267 monkeyboy
monkeyboy's picture

redacted

 

Fri, 01/23/2015 - 08:02 | 5695764 Refuse-Resist
Refuse-Resist's picture

ah 9/11.

 

The day when the Bush administration delcared Newton's Laws of Motion to be temporarily suspended. And the day when 4 airplanes crashed and there was no plane debris.  The day when cartoon physics came to real life and office fires melted steel.

 

A day to remember. And I'm sure (yeah right) that those '28 pages; will explain it all.

 

 

Fri, 01/23/2015 - 10:10 | 5696239 Clashfan
Clashfan's picture

SA was involved; so was Izrahole, too!

Thu, 01/22/2015 - 22:50 | 5694939 Bangalore Torpedo
Bangalore Torpedo's picture

This contributor has NO clue. 

Thu, 01/22/2015 - 23:35 | 5695060 BigJim
BigJim's picture

Feel free to elaborate.

Can't? Then STFU.

Fri, 01/23/2015 - 00:32 | 5695254 Chad_the_short_...
Chad_the_short_seller's picture

lol

Thu, 01/22/2015 - 22:54 | 5694947 Son of Captain Nemo
Son of Captain Nemo's picture

Not directly related to oil but great news if it is coming together...

Also might help explain the moves by the SNB last week!

Thu, 01/22/2015 - 22:55 | 5694955 nosoeawe
nosoeawe's picture

satan declared jihad on the filthy saud's asshole

one thrust for every american this pile of shit murdered on 911

satan's going medieval on this mother fucker right about now

Thu, 01/22/2015 - 22:57 | 5694958 Chupacabra-322
Chupacabra-322's picture

What will surprise those who may already be surprised about the Dönmeh connection to Turkey, is the Dönmeh connection to the House of Saud in Saudi Arabia.

An Iraqi Mukhabarat (General Military Intelligence Directorate) Top Secret report, “The Emergence of Wahhabism and its Historical Roots,” dated September 2002 and released on March 13, 2008, by the U.S. Defense Intelligence Agency in translated English form, points to the Dönmeh roots of the founder of the Saudi Wahhabi sect of Islam, Muhammad ibn Abdul Wahhab. Much of the information is gleaned from the memoirs of a “Mr. Humfer,” (as spelled in the DIA report, “Mr. Hempher” as spelled the historical record) a British spy who used the name “Mohammad,” claimed to be an Azeri who spoke Turkish, Persian, and Arabic and who made contact with Wahhab in the mid-18th century with a view of creating a sect of Islam that would eventually bring about an Arab revolt against the Ottomans and pave the way for the introduction of a Jewish state in Palestine. Humfer’s memoirs are recounted by the Ottoman writer and admiral Ayyub Sabri Pasha in his 1888 work, “The Beginning and Spreading of Wahhabism.”

In his book, The Dönmeh Jews, D. Mustafa Turan writes that Wahhab’s grandfather, Tjen Sulayman, was actually Tjen Shulman, a member of the Jewish community of Basra, Iraq. The Iraqi intelligence report also states that in his book, The Dönmeh Jews and the Origin of the Saudi Wahhabis, Rifat Salim Kabar reveals that Shulman eventually settled in the Hejaz, in the village of al-Ayniyah what is now Saudi Arabia, where his grandson founded the Wahhabi sect of Islam. The Iraqi intelligence report states that Shulman had been banished from Damascus, Cairo, and Mecca for his “quackery.” In the village, Shulman sired Abdul Wahhab. Abdel Wahhab’s son, Muhammad, founded modern Wahhabism.

The Iraqi report also makes some astounding claims about the Saud family. It cites Abdul Wahhab Ibrahim al-Shammari’s book, The Wahhabi Movement: The Truth and Roots, which states that King Abdul Aziz Ibn Saud, the first Kingdom of Saudi Arabia monarch, was descended from Mordechai bin Ibrahim bin Moishe, a Jewish merchant also from Basra. In Nejd, Moishe joined the Aniza tribe and changed his name to Markhan bin Ibrahim bin Musa. Eventually, Mordechai married off his son, Jack Dan, who became Al-Qarn, to a woman from the Anzah tribe of the Nejd. From this union, the future Saud family was born.

http://m.strategic-culture.org/news/2011/10/26/the-doenmeh-the-middle-ea...

Thu, 01/22/2015 - 23:00 | 5694963 cherry picker
cherry picker's picture

I don't know why they are speculating.  Only time knows what will happen.

Thu, 01/22/2015 - 23:22 | 5695021 pipes
pipes's picture

It's not so much speculaton as it is an attempt at pumping the market.

Thu, 01/22/2015 - 23:02 | 5694975 disabledvet
disabledvet's picture

TO THE CAMELS!

WE RIDE AT DAWN!

Fri, 01/23/2015 - 00:13 | 5695190 Flybyknight
Flybyknight's picture

Reminds me of an old joke.

A newcomer joined an  oil exploration camp out in the desert and after a month he asked how do you  get by without women. An old hand said "just wait for the camel train." Another month went by and the newcomer asked the question of another old timer and got the same answer. A few weeks later he suddenly found everyone was running in the direction of an approaching dust cloud. He joined in and asked of the others, "what is the great hurry?" To which the reply was "Don't want to get an ugly camel"

Thu, 01/22/2015 - 23:04 | 5694983 teslaberry
teslaberry's picture

he was jewish. the suadi abdullahs are jewish!!!!

Thu, 01/22/2015 - 23:04 | 5694988 Platypus
Platypus's picture

"As a reminder, it is Saudi Arabia whose insistence on not cutting oil production with the intent of hobbling the US shale industry has led to the splinter of OPEC, and to a Brent price south of $50." Really? Or was America making the Saudis not cut production to bankrupt Russia !!

Fri, 01/23/2015 - 00:16 | 5695203 chubbyjjfong
chubbyjjfong's picture

Unlikely. The petrodollar is slowly dying and the derivitives surrounding the Shale debt shit pile are imploding and taking the oil price with it. The Saud know it would be prudent timing to help it on its way.

Fri, 01/23/2015 - 00:28 | 5695237 forwardho
forwardho's picture

As a reminder the demand for oil has dropped at the same time the populations of the OPEC Nations are demanding their standard of living improve.

Improvements promissed and paid for with oil revenues.

They cannot afford to cut production. 

The old adage; You may catch a tiger by the tail but you sure as hell can't let go. Comes to mind.

 

 

Thu, 01/22/2015 - 23:06 | 5694989 falconflight
falconflight's picture

Come on you Ayatollah cacksuxers, make your move.

Fri, 01/23/2015 - 04:40 | 5695579 HughK
HughK's picture

The Ayatollahs are Shias, Falcon.  Think Iran and (the majority in) Iraq.  The Saudi royal family tends to dislike Shias.

Thu, 01/22/2015 - 23:18 | 5695012 Robot Traders Mom
Robot Traders Mom's picture

People are going to try and overthrow the House of Saud, but the revolt will be crushed, with the help of the US and Israel. It will be bloody, merciless, and will ultimately end very poorly for the people.

If this starts to shake out like the manufactured 'Arab Spring' in Egypt ( but probably without the same amount of media coverage), it could put some pressure on oil to head back up...

www.TopTheNews.com

Fri, 01/23/2015 - 00:09 | 5695169 bid the soldier...
bid the soldiers shoot's picture

 

The House of Saud has a secret police so secret that nobody's ever heard ot it.

Unlike the Mossad who wants the world to tremble before it's name, the Saudi Secret Police wants to be invisible, especially at home.

For those of you who don't believe OBL brought down the WTC, say 'hello' to the Saudi Secret Police. 

Fri, 01/23/2015 - 04:44 | 5695584 Counterpunch
Counterpunch's picture

I don't believe OBL brought down the WTC.

 

I don't have any particular alternative or conspiracy theory, mind you, I'm just, you know - reasonable.

Sat, 01/24/2015 - 03:29 | 5699195 bid the soldier...
bid the soldiers shoot's picture

Please put aside your reasonableness for a moment.

15 Saudis on the 911 planes.

Saudi Arabia's secret police so secret that you never knew about them.

The House of Saud beholden to the first Bush president for 1st Gulf War.

The first Bush president, erstwhile Director of the CIA, therefore familiar with plotting and scheming.

The second Bush, after 7 months in office, approval rating in the low 40%'s 

The second Bush the only beneficiary of 911 when his approval jumped into the 90%'s

Okay, you can be reasonable again.

Fri, 01/23/2015 - 00:45 | 5695286 Chad_the_short_...
Chad_the_short_seller's picture

Wouldn't that be awesome if they overthrew saudi and had them and yemen? us and israel would flip and i would love it. It's time to end the NWO!!! I don't want to witness it taking over the world. Crush it, somehow, someway no matter who stands up to fight it. We can't let zionism to rule because that would really be the death of humanity.

Fri, 01/23/2015 - 10:14 | 5696273 Clashfan
Clashfan's picture

RTM, perhaps, and don't forget Yemeni turmoil at a peak, threatening to choke the narrow passage, begging for boots on the ground...

Thu, 01/22/2015 - 23:28 | 5695029 Dathedr
Dathedr's picture

Hopefully we shall see ISIS in Saudi Arabia soon. Would be a wonderful sight to behold I think. And it's only the right place where Allah's sacred warriors indeed do belong on entire planet, don't you think? Mecca and Medina (Muslim holy sites) are both in the Kingdom, so it's only natural for ISIS to take them. Now imagine that House of Zionist's cocksuckers, House of Saud, holding those divine Muslim places on Earth... something just doesn't fit right. It's a sacrilege. So hopefully we are seeing the last days of that Cabal's cocksuckers on Earth.

Thu, 01/22/2015 - 23:37 | 5695073 disabledvet
disabledvet's picture

Yeah, yeah...a little Funky Cold Medina this time!

Thu, 01/22/2015 - 23:41 | 5695097 Yen Cross
Yen Cross's picture

You're getting closer to reality. Start walking every morning, and stay off the yellow lines.

Thu, 01/22/2015 - 23:41 | 5695087 BigJim
BigJim's picture

Even if the early Wahhabs were Jews, I doubt many of the Muslim 'faithful' footsoldiers in ISIS are now.

If ISIS seized Saudi I can imagine them forbidding any non-Sunnis access to Mecca. Now wouldn't that be interesting?

Fri, 01/23/2015 - 13:05 | 5697123 detached.amusement
detached.amusement's picture

yeah but its going to take a while for them to focus on that, with the mossad going "no, over heeeere"

Thu, 01/22/2015 - 23:41 | 5695088 tip e. canoe
tip e. canoe's picture

tinfoil hat theory of the day: 

dude's been dead awhile now.

anybody taking odds?   give me 13:1, i'll put down a shiny oz. on before new year.

 

Fri, 01/23/2015 - 00:02 | 5695144 Yen Cross
Yen Cross's picture

  Blast! Sarcophagus Cental 91 / NEWS.

 I love your humor Tip.E

Fri, 01/23/2015 - 00:18 | 5695207 tip e. canoe
tip e. canoe's picture

likewise your seriousness YC // nice note on pointing out the keypoint of the exponential curve earlier.

gotta love that Tricky Dick, a quintessential American Antihero fo'sho.

Fri, 01/23/2015 - 01:34 | 5695359 Yen Cross
Yen Cross's picture

 Thanks, don't be a stranger. ;-)

Fri, 01/23/2015 - 01:48 | 5695371 old naughty
old naughty's picture

"...been dead a while now..." implying hidden agenda to time the news, no?

It also means no freedom in kingdom, kings and captains are no different to oligarchs (puppets), alive or dead.

Geopolitics (pressure cooking) at play, oil prices, tribe conflict, fearmongering (WMD,etc), economic forum...

all according to plan, since WW!, no?

Trick Dick, what about? K's "secret" trip to China (someone else's sending him in there, nowadays) or ...?

 

Thu, 01/22/2015 - 23:42 | 5695095 SystemicSarcasm
SystemicSarcasm's picture

give them Saudis a succession... Saudis love Successions

Fri, 01/23/2015 - 00:00 | 5695142 NoWayJose
NoWayJose's picture

A silver quarter bought a gallon of gas in 1964. Today, a silver quarter can buy you TWO gallons of gas in a few towns!

Fri, 01/23/2015 - 01:29 | 5695353 old naughty
old naughty's picture

noway, i am uncertain as to what you're implying here:

progress (as in growth);

welfare (as in .gov handout); or

a piece of cake (bread and circus) ?

in any case, do you believe it's sustainable?

 

Fri, 01/23/2015 - 00:10 | 5695176 jonjon831983
jonjon831983's picture

Stratfor update of naval doesn't show much presence.... perhaps in coming week could see some movement there?  A token showing US/Saudi alliance remains strong.... or perhaps not...

Fri, 01/23/2015 - 00:21 | 5695215 The Fonz...befo...
The Fonz...before shark jump's picture

Don't forget Yemen, their whole government resigned today as well...
That's two Islamic kingdoms in turmoil tonight....

Fri, 01/23/2015 - 01:33 | 5695355 old naughty
old naughty's picture

so you're perhaps suggesting the existece of wild card(s)?

Hence, we can expect un-normal outcome?

Fri, 01/23/2015 - 00:22 | 5695219 magnetosphere
magnetosphere's picture

wait what on earth is this guy talking about?  the back end of the oil curve is nowhere near $80

Fri, 01/23/2015 - 00:37 | 5695269 combatsnoopy
combatsnoopy's picture

Well then!  I hope the Saudis are already paid up on the US attack on Syria that they told Kerry that they would finance.  

Fri, 01/23/2015 - 00:55 | 5695311 sam i am
sam i am's picture

The World War III will end in one... two... three... months

Pentagon Confirms US Troops Will Deploy to Ukraine in Spring

http://russia-insider.com/en/2015/01/23/2678

 

Remember the new Defense Doctrine of the Russian Federation? Any attack on Russia (Crimea is a part of Russia) will be answered by a nuclear strike on the United States.  No ifs, or buts.

Fri, 01/23/2015 - 00:57 | 5695315 opencircle
opencircle's picture

Quote '

 As a reminder, it is Saudi Arabia whose insistence on not cutting oil production with the intent of hobbling the US shale industry has led to the splinter of OPEC, and to a Brent price south of $50. '

---------------------

Repeat the lie enough times and it becomes the truth. Saudi oil exports today are 7mbpd, about 0.2mbpd lower than in 2008. Why are they responsible for Surplus oil today?

Misdirected article taking readers for a ride. Politically, this is a great time to destroy the country though and let a few cronies take over state oil companies, seize more gold and freeze overseas assets of the state.

 

 

 

Fri, 01/23/2015 - 01:01 | 5695321 Joe Tierney
Joe Tierney's picture

Petrodollar+

Petrodollar-

 

I'm watching what happens to the already deeply-strained U.S.-Saudi relationship now....

 

Will the Saudis let the grand petrodollar bargain wilt on the vine, or will they even abandon it in favor of a new grand bargain with Russia-China?

 

They certainly aren't going to deepen or renew that old bargain. 'Bananas' Barry will have a notable legacy - how he lost that bargain and with it the U.S.-Saud relationship. This of course has great repercussions for the petrodollar.

 

I feel an acceleration of the petrodollar's demise in the air. Don't you?

Fri, 01/23/2015 - 05:43 | 5695629 css1971
css1971's picture

It puts the Yemen coup in a new light. The sun must be getting hotter in Saudi.

Fri, 01/23/2015 - 02:40 | 5695435 Counterpunch
Counterpunch's picture

Saudi Arabia is slated for regime change - it's just a matter of when.

 

 

The thing is - do they know so, and if so, have they made contingency plans?

 

Don't get me wrong - fuck 'em - largest state sponsor of terrorism after the US and Israel.

Fri, 01/23/2015 - 02:55 | 5695456 freedom123
freedom123's picture

Under New World Order regime which rules Putin in Russia there is no freedom of speech, there is only Putin regime ministry of Truth. If someone stand against regime and write truth than that person is jailed!

 

Imprisoned Russian journalist sentenced to new three-year jail term

http://www.cpj.org/2015/01/imprisoned-russian-journalist-sentenced-to-ne...

Fri, 01/23/2015 - 04:45 | 5695506 Counterpunch
Counterpunch's picture

Will you stop threadjacking, you fucking cunt.  And pardon me for being far more worried about the UK and US, where liberties have been receding [at least in Russia they are more free than 15 or 20 years ago].

I'm also more concerned with the fact that, increasingly, people in Europe who criticize Israel, or Judaism as a religion, or Zionism as a nationalistic/racialist militarism, risk jail for saying things they would be free to say about any other ethnic or religious group.


Why aren't you?

Fri, 01/23/2015 - 04:49 | 5695585 man of Wool
man of Wool's picture

Because its not true.

Fri, 01/23/2015 - 04:55 | 5695590 Ghordius
Ghordius's picture

"the fact that, increasingly, people in Europe who criticize Israel, or Judaism as a religion, or Zionism as a nationalistic/racialist militarism, risk jail for saying things they would be free to say about any other ethnic or religious group. "

I agree that it's something to be concerned about. but generally speaking, those laws forbidding "incitements to violence and denigration of groups" are supposed to protect all groups

it's just that some groups are better organized to take full "advantage" of those laws, while many don't understand the exact boundaries of those laws

Fri, 01/23/2015 - 05:40 | 5695625 css1971
css1971's picture

During the campaign for Scottish Independence referendum, the journalists of the BBC and other news outlets refused to show pro independence campaigners. On one occasion they cut a live broadcast as one of the campaigners was assaulted and removed from the picture.

On other occasions they arranged photos of small numbers of anti campaigners to give the impression that the support at a meeting or gathering was large.

 

So, please forgive me if I tell you to go fuck yourself with respect to journalists rights.

Fri, 01/23/2015 - 06:39 | 5695667 Jano
Jano's picture

Imprisoned Russian journalist ?

In US he would get killed, see M. Hastings.

Fri, 01/23/2015 - 03:39 | 5695493 ThroxxOfVron
ThroxxOfVron's picture

" In Libya, that country’s last remaining intact and functioning institution, its Central Bank with $100 billion in foreign currency reserves, fell to marauding militiamen. "

http://www.nytimes.com/2015/01/23/world/middleeast/yemen-houthi-crisis-s...

Fri, 01/23/2015 - 03:43 | 5695512 Counterpunch
Counterpunch's picture

that central bank was set up as NATO was acting as Al Qaeda's Air Force. 

 

It's privately owned.

 

I wonder who owns it.

Fri, 01/23/2015 - 08:04 | 5695767 Refuse-Resist
Refuse-Resist's picture

Good point. With regard to your question, my guess would be a certain group of people we aren't allowed to criticize.

Fri, 01/23/2015 - 07:11 | 5695706 sidiji
sidiji's picture

lol ZH, so now higher oil is a bad thing?  make up your damn mind.  you cant have it 'bad' going both ways

Fri, 01/23/2015 - 08:06 | 5695769 Refuse-Resist
Refuse-Resist's picture

What? Obviously you haven't watched enough MSM because if you did, you'd know that in America, WE CAN  HAVE IT ALL.

Then when we get it all, we want MOAR.

Fri, 01/23/2015 - 08:12 | 5695779 falga
falga's picture

This author completely ignores the fact that Iraq exports have more than doubled...he also ignores the issue of Nigeria and Venezuela. Why are they still producing??? The issue is peak demand maybe behind us....

Fri, 01/23/2015 - 08:33 | 5695825 d edwards
d edwards's picture

Could be an opportunity for IsIs to disrupt things.

Fri, 01/23/2015 - 09:36 | 5696029 yearight
yearight's picture

The king is dead, long live the king or some sh1t like that!

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