Iran

The vicious Isis attacks in Paris represent yet another unpardonable offense; and through war, Cameron and Hollande seek to avenge the innocents who were killed and wounded. But as the humiliating outcome of the Suez war reminds us, there are some problems to which war is an unsuitable response. Across much of the greater Middle East today, we confront one such problem. For western governments to reflexively visit further violence on that region represents not a policy but an abdication of policy. It’s past time to think differently.

"In the year ahead, geopolitics likely poses the greatest potential to disrupt markets in terms of event risk. There is also the potential for geopolitical risks to intersect with economic fragility in the event of a downturn, amplifying both."

OPEC HAS AGREED TO OIL OUTPUT POLICY ROLLOVER, SETS TARGET AT 31.5 M B/D AFTER INDONESIA JOINS: DELEGATE. This increases the output limit up from 30 million but is merely reflective of the current real output from the Cartel of 31.5 million barrels. And crude is crashing, Ruble is dumping and gold is jumping.

As Reuters reports, "Israel has quietly tested ways of defeating an advanced air-defense system that Russia has deployed in the Middle East and that could limit Israel's ability to strike in Syria or Iran, military and diplomatic sources said."

"There has been a bunch of headlines coming out of OPEC with each contradicting the other," says Petromatrix analyst Olivier Jakob. “It is difficult to trade in front of OPEC - the general consensus is for nothing, but when we get a soundbite that creates a bit of a reaction." However, once the OPEC meeting announces that, sorry Venezuela but nothing changes, expect the early upward bias to crude prices to promptly reverse.

"Let’s be very clear: ISIS is not just a terrorist organization; it is a Sunni terrorist organization. That means it blocks and targets Shi’a. And that means it’s serving the interests of Turkey and Saudi Arabia - even as it poses a threat to them." - Retired Gen. Wesley Clark

When will America’s half-witted elite running the Pentagon and the State Department see the light and acknowledge that perhaps the US lacks the qualifications, or resources, to run, or strongly influence, geopolitics throughout Planet Earth?

Eighty-five years after the birth of French filmmaker Jean-Luc Godard, and the crude complex is acting suitably surreal today. As expected, rhetoric is ratcheting up out of Vienna ahead of tomorrow’s OPEC meeting, with the crude market shaken up like a snowglobe.

According to the latest US naval map update from Startfor, the Truman is now off the Libyan coast, rapidly approaching Italy, and we expect is ahead of scheduled year-end ETA to its final destination, a few miles off the Syrian coast.

"When Russia courageously stepped into the breach we should have been applauding its willingness to confront ISIS. Instead, we continue to denigrate Russians as if they were still the Soviet Union and Putin, not Islamic terrorists, our most vicious enemy."

• Mario Draghi Is About to Become the World's Market Risk Manager (BBG)
• Five Things to Ask Mario Draghi From Negative Rates to QE (BBG)
• Leaving behind baby and bombs, couple sows panic in California (Reuters)
• Couple's motive in California rampage a mystery for police, family (Reuters)
• In Grim Ritual, Barack Obama Again Calls for Stricter Gun Control After Mass Shooting (WSJ)
• Islamic State Defeat Impossible Without Ground Force, Kerry Says (BBG)
• OPEC States Push for Output Cuts in Face of Saudi Opposition (BBG)

Turkey is the next key region in this conflict, since the only alternative gas pipeline that supplies Russia, and comes from Asia (Nabucco), passes through Turkey. Future conflicts between Turkey and Russia will be part of the Russian strategy within the region. 

Decoding the war in Syria is not for the faint of heart. For those looking to make sense of it all, we present the following infographic which should go some ways towards untangling what has become one of the most complex, convoluted wars in recent memory.

And so it begins...