Thursday, January 22, 2015

The King Is Dead, Long Live the King

Oil prices jumped in early Asian trading on Friday as news of the death of Saudi Arabia's King Abdullah added to uncertainty in energy markets already facing some of the biggest shifts in decades.

Abdullah died early on Friday and his brother Salman became king, the royal court in the world's top oil exporter and birthplace of Islam said in a statement carried by state television.

[...]

Oil prices have more than halved since peaking in June last year as soaring supplies clash with slowing demand.

Booming U.S. shale production has turned the United States from the world's biggest oil importer into the biggest producer, producing more than 9 million barrel per day.

To combat soaring output and falling prices, many oil exporters, such as Venezuela, wanted the 13-member Organization of the Petroleum Exporting Countries (OPEC) to cut output in order to support prices and revenues.

Yet, led by Saudi Arabia, OPEC announced last November it was keeping output steady at 30 million barrels per day.

  Reuters
That an 80-year-old with health issues of his own—he reportedly suffers from dementia—is now taking over means Abdullah’s grandsons could soon be jostling over who should be the long term successor. In the meantime, Salman is expected to maintain the kingdom’s alliance with the United States.

  The Daily Beast
The new king has dementia? Great. Apparently, so does the kingdom.
U.S. crude prices rose about 1.5 percent immediately after the kingdom announced the news Thursday evening. [...] The kingdom reportedly delayed the announcement so that his date of death would fall on a Friday, the Muslim holy day of the week.
Just because they don’t announce it doesn’t mean it didn’t happen.

And, that’s not all that happened in the region on Thursday…
Earlier in the day, the Yemeni government was in shambles after the president and cabinet resigned in the face of pressure from the Houthis, backed by Iran. It is unclear who will lead Yemen; the Houthis said Thursday they will form a presidential council.

In single day, two of the United States’ most important partners in the region are gone. What follows next is unclear.
So, now we turn to the ever excellent Middle East expert Jeremy Scahill….


And up next...Jeremy on the latest in Yemen...

...but hey, do what you want...you will anyway.

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