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Global Energy Advisory – 29th May 2015

Politics, Geopolitics & Conflict

As we predicted, trouble has flooded across Saudi Arabia’s eastern border with Yemen. On 22 May, a suicide bomber blew himself up at a Shi’ite mosque here, with several killed and scores wounded. This was in the village of al-Qadeeh. The battle between Saudi forces and Yemen’s Houthi forces has significantly intensified since the Saudis launched their bombing campaign eight weeks ago, and we’re looking a lot of carnage here, with no visible results for either side. The main border crossing has been destroyed. If it goes too much farther, this proxy war between Iran and Saudi Arabia could turn into an actual war. The Saudis will use this to try to derail a P5+1 nuclear deal with Iran. The fact remains, though, that Washington has a number of grievances with Saudi Arabia that have been piling up since 9/11. In the meantime, if the Islamic State (IS) ever manages to force a regime change in Syria, the next target would be Saudi Arabia. This kingdom will eventually fall—and the desperation is increasing exponentially, as made clear by its horrendous foreign policy.

And, back to the IS … they have taken approximately one-third of the ancient Syrian city of Palmyra as of mid-last week. This is the ‘pearl’ of the Ancient Silk Road, which means it has strategic value as Syria’s central crossroads. What it means is that IS—if it manages to definitively take Palmyra—will be able to launch attacks in all directions against the Assad regime. Civilians here are now either refugees in the best case scenario, or they are being beheaded.

But an even bigger game is being played out in Ramadi, the capital of Iraq’s Anbar province. While you will see various reports about Ramadi, from where we’re sitting, there is no contest here—IS has largely taken the city. This is a major defeat for Iraq; and for Washington as well. The next stop will be Karbala and Iraqi military bases and weapons depots between the two. Iraq will deploy Shi’ite militias to attempt to thwart the IS advance and retake Ramadi. (Shi’ite militias had been kept from fighting until now in Anbar Province because it’s a largely Sunni area). At the same time, those Sunnis who are against the IS were, of course, never weaponized to fight them, so this will not go down well. There was another clear message during all this: Iran and Iraq are fighting the IS,…




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