Yemen scare effect disappears in oil market

March 30, 2015 8:40 AM (UTC+8)

 

The Sunni world has united under Saudi leadership to contain Iran’s ambitions. Asia Times readers read it first, in analysis by Spengler on March 27 and M.K. Bhadrakumar on March 28. Asia Unhedged wrote March 26 that the Yemen effect on oil prices would be transient: “Evidently the Saudis have gotten their ducks in a row, lined up support among Sunni capitals from Cairo to Islamabad, and taken the velvet glove off the mailed fist. There’s not a great deal Iran can do about it. The emergence of a Sunni coalition using Arab forces to contain Iranian-backed insurgencies is a big positive for Persian Gulf security. Once the shock and awe fades, that should be a negative for oil prices.”

Daniel Pipes, the president of the Middle East Forum, wrote in the Washington Times March 28: “The Middle East witnessed something radically new two days ago, when the Kingdom of Saudi Arabia responded to a plea by Yemen’s president and led a 10-country coalition to intervene in the air and on the ground in the country.” Defense News picked up the story March 29 under the headline, “Saudi Arabia Emerges as New Regional Leader.” Reporter Awad Mustafa writes, “Within a 24-hour period, King Salman of Saudi Arabia delivered a firm shock to the Iranian intelligence services, established the kingdom as the leader of the Arab world and realigned regional powers to establish a formidable alliance to fend off Iranian influence in the region.”

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As we expected, the oil price came off sharply on Friday and remained down in early trading Monday.

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