Category Archives: Middle East

CalSTRS, Maryland Fund Private Equity Players Seeking Profits in the Refugee Crisis

Private-equity-backed providers undercut charities in providing refugee services. It’s not hard to imagine how the results are coming in.

Low Oil Prices Could Break The “Fragile Five” Producing Nations

Five countries, and not necessarily the ones you’d expect, are particularly vulnerable to protracted low oil prices.

William J. Astore: Seventy Years of Military Mediocrity

How the US has developed military muscle at the expense of brainpower.

Saudi Oil Strategy: Brilliant Or Suicide?

Does it make sense to look at the Saudi strategy within the oil industry alone, or do analysts need to start factoring in deflationary economic policies around the world?

The Balance of Power in the Middle East Just Changed, U.S.-Iranian Relations Emerge from a 30-Year Cold War

Don’t sweat the details of the US/Iran nuclear accord. What matters is that the calculus of power in the Middle East just changed, big time.

Andrew Bacevich: Washington in Wonderland, Down the Iraq Rabbit Hole (Again)

The many false and self-defeating premises behind our continued intervention in Iraq.

Michael Klare: Delusional Thinking in Washington, The Desperate Plight of a Declining Superpower

How US superpower overreach has hit the breaking point, yet the officialdom acts as if somehow doing more will succeed.

How the China’s New Silk Road is Shifting Geopolitics

Even though China’s Silk Road initiative is in its early stages and still opportunistic, traditional rivalries could impede progress. Even so, the US is concerned about how China has gotten and is making countermoves.

Bill Black: The BBC Dismisses a Real Greek Economist as a Sexy “Ideologue”

Yves here. I know some readers have begged to differ, but Very Serious People are not described in the same terms as pop culture icons. Thus, as Bill Black points out, the “rock star” branding of Varoufakis is a way to depict him as a colorful, entertaining lightweight.

Since the U.S. Military Lost the Last Two Wars It Fought, Is There Reason to Think “Boots on the Ground” Anywhere Is a Good Idea?

We are what we repeatedly do, and what our military repeatedly does is lose. Sending them into Ukraine or Iraq would be demented.

OPEC Fires First Shot In Global Oil Price War

Yves here. Some readers took issue with our view that the Saudis, and now OPEC, decision against curbing production to support oil prices, was a classic example of predatory pricing, in which a player produces at an uneconomical cost in order to inflict damage on competitors, force them to curtail operations on a permanent basis, and then harvest higher returns later via having thinned out suppliers. As the post below indicates, it’s now increasingly recognized that the Saudis want oil prices lower, and a big reason is to weaken US shale operators (we also suggested that the Saudis also have geopolitical aims for this move, since the countries that get whacked have either been unfriended by Riyadh or are official enemies).

Analysts have taken almost entirely to discussing the Saudi “fiscal breakeven” which is the oil price it needs to raise enough revenues to funds its government, at $90 a barrel, to contend that the Saudi’s can’t afford to allow prices to remain low for all that long. But the desert kingdom has a lot of unused borrowing capacity and clearly does not see its near-term budget issues as a driving consideration. Ambrose Evans-Pritchard, based on a Citigroup analysis that has been making the rounds, argues that the Saudis have misread US shale economics and also contends that many producers have hedged their output, insulating them from the downdraft. Despite its detail, the Citigroup analysis diverges in so many respects from other accounts that I’d like to see more corroboration (recall Goldman’s similarly celebrated forecast that oil was going to over $200 a barrel).

Oil Tanks After OPEC Fails to Cut Production; US Shale Gas Targeted?

After a testy meeting, OPEC agreed to maintain current production targets. The failure to support oil prices via reducing production led to a sharp fall in prices on Thursday, with West Texas Intermediate crude dropping by over 6% and Brent plunging over 8% before rebounding to finish the day 6.7% lower, at $72.55 a barrel. Many analysts believe that oil could continue its slide to $60 a barrel.

A Truce In The Holy Oil War?

Yves here. This development, of Qatar potentially falling in line with Saudi Arabia, would represent a meaningful shift in Middle Eastern dynamics. But whether this is the beginning of the end of ISIS, or of the “holy oil war,” is another matter. ISIS started out as Prince Bandar’s private army, and it is not hard to imagine that the Saudis wield considerable influence. Among other things, the Saudis remain mighty unhappy over the fact that the US did not escalate in Syria in 2013, and has refused (in a rare show of wisdom) to attack Iran.