In an almost widely expected turn of events, the protests that have occurred throughout Northern Africa and now the Middle East has finally spread to the most important and sensitive geopolitical US ally, Saudia Arabia.
Al Jazeera and other Middle Eastern news organizations have reported that protests have now started in Jeddah, Saudi Arabia.
While not receiving overt foreign aid from the US, unlike Egypt who receives about $1.5 billion each year despite not having a strong economic need nor accomplishing anything deserving of such an aid, the Sauds have been strong allies of the US due to its pro-US stance and obviously because of its large supply and production of oil. (This despite the fact that they continue to be the #1 source of funding for most terrorist organizations that try to strike the US)
Tunisia, Algeria, Egypt, Yemen, Bahrain are not significant oil producers but clearly Saudi Arabia is extremely important to oil production worldwide.
The argument against the protests spreading throughout Saudi Arabia, has been that the Saudi Arabian people live a significantly higher standard of living than most of their Arab counterparts (courtesy of the world's addictive world habit) and therefore the high rates of unemployment amongst the Egyptians (officially stated at 9.7% but estimated to actually be northwards of ~12%, yes government statistics lie similar to how the BLS does so here in the US) was the main catalyst for the protests in Egypt and that same problem does not exist in Saudi Arabia.
It appears these protests in Jeddah are mostly in response to a poor response from the government about recent flooding that occurred in the country. The ideologically protests against a repressive and corrupt Mubarak regime (who is definitely supported by the US despite what our rhetorically gifted president may come out and say) still have listeners over in Saudi Arabia.
What are thoughts on all of this? Do you guys think we could expect to see protests spreading to Saudi Arabia?
If the protests in Jeddah grow across the country, expect oil prices to spike well past $100/barrel and potentially past the 2007 highs.
Well I bought some OIL on Friday anyway.
No they won't spread. Saudi can placate citizens with oil money and Egypt can't. I doubt Mubarak is out; there is no clear opposition leader and protests without one tend to fizzle out more often than not.
In my opinion, this is a great buying opportunity because the selling is rather irrational. Apache is a good buy here.
This for the people who didn't believe the Suez Canal was actually vulnerable at all... (I will admit I was one of the skeptics)
http://www.time.com/time/world/article/0,8599,2045124,00.html
"And a prominent Bedouin smuggler in the Sinai peninsula told TIME that Bedouin are now in control of the two towns closest to the Gaza Strip, and that they planned to press on to attack the Suez Canal if Mubarak does not step down."'
Long OIL looking good here monkeysama.....
kk, long story short, 1) someone currently in Saudi said "there were protests in Jeddah about the flooding and the failed drainage system, nothing full blown anti-regime yet" ... 2) Rumor is that someone is organizing, on Feb 5th, a protest in Syria, which I think it will have its significance. 3) Anyone thinks Suez Canal is vulnerable is out of his mind. 4) Mubarak is out one way or another (He is old and ill), probably a staged resignation. Successor will probably be one of the military leaders (he has a military back ground too, but he want his son who is not from the military to assume his power after he die, lets say some people in the army are pissed. now it's not going to happen) 5) confirmed that army has open fire to protesters today, as oppose to internal security force. Sign that military seems to cut a deal with Mubarak. 6) whether the army be able to contain the situation is very crucial... is it going to spread all over Middle East? I don't see it will happen, judging by the current status. 7) For trading, I would be cautious, all kinds of rumors out there, it's safer to play with spreads than betting outright front month WTI going up. another thing to play is OVX (oil volatility index)
"This despite the fact that they continue to be the #1 source of funding for most terrorist organizations that try to strike the US" Who's "they"?
Anyways. I'm a Saudi, born and raised in Jeddah. And not to worry, the protest, which happened in the swanky Tahlia district, was pathetic. About 50 to 70 people showed up. So this definitely won't affect the price of oil. I honestly don't see why they needed to protest and make a big deal out of nothing.
@onebuck: The beduins in Egypt are weak and uneducated. They're using old rifles, circa 1940-1950 against Bradleys and AK47s used by trained armed forces. No need to worry. And their numbers are quite low, frankly.
I've been waitng for a moment to be long RBOB heading into the summer driving season. OPEC has scheduled a Feb. 17th meeting.
I HIGHLY doubt that the Suez Canal will close. It would be hurtful to our economy, but it would be destructive to Egypt's and their neighbors.
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