![](/sites/default/files/styles/hart_news_article_image_640/public/image/2019/02/map_1.jpg?itok=rm_Ryjg5)
Stratas Advisors is a Hart Energy company.
In May 29, the Islamic State claimed responsibility for a suicide bombing targeting the Shi’a Imam Hussein Mosque in the city of Dammam, Saudi Arabia, in the kingdom’s oil-rich eastern province. That was preceded by a suicide bombing at a second Shi’a mosque in the kingdom’s eastern governorate of Qatif the week before. Last November, gunmen murdered several Shi’a worshippers in the eastern Saudi province of Al-Ahsa.
Saudi intelligence has made dozens of arrests related to these security incidents. The monarchy has done nothing to stop the root of the problem, however, which is sectarian incitement by radical Wahhabi religious leaders within the kingdom, whom it has depended on to legitimize its rule as well as maintain and expand its geopolitical influence vis-à vis-Iran and other regional rivals.
The Saudi monarchy has maintained an at-best ambivalent attitude toward these malignant social elements despite ample evidence that they are planting the ideological seeds that are increasingly spawning terrorists loyal only to the realization of their retrogressive utopian myth.
The Obama administration wisely has demonstrated its reticence to side definitively with either Saudi Arabia or Iran in their violent regional contest. The administration’s efforts to bolster the moderates are inadequate, however.
The fall of Ramadi to the Islamic State on May 17 may prove to be only a temporary setback for the Iraqi military, but with an effectively limitless pool of Islamic State recruits in Syria, this movement, led in part by former Iraqi military officers from the Saddam Hussein era, is likely to remain a threat to Baghdad for the foreseeable future.
Although it would be a highly risky decision, if the Islamic State managed to destabilize Baghdad by infiltrating assassins and suicide bombers into the capital, the Obama administration might decide on a policy of containment, forcing the regional powers to intervene more directly. This could result in severe disruption of Iraqi oil production and would probably lead Iran to deploy a heavier military presence into Baghdad and Iraq’s Shi’a-majority provinces. It would also pressure Saudi Arabia and Jordan to provide greater military backing to Sunni tribes in Iraq’s Anbar Province, while Turkey would be forced to consider intervening in Syria’s and Iraq’s northern provinces. The U.S. in this scenario would provide military aid to one Iraqi or Syrian faction or another in an effort to balance the influence of the regional powers.
A limited U.S. military intervention involving a ground force of perhaps 20,000 troops, as some policy analysts are advocating, would ultimately only buy time for Iraqi political elites to do what they have thus far been unwilling to do—form a representative government not based on sectarian identities. More likely, it would have the perverse effect of enabling them to continue indulging in short-sighted political behavior.
A collapse of the Iraqi government would give the U.S. a window of opportunity to reestablish a full military occupation authority backed by several hundred thousand troops under a Chapter VII U.N. Security Council Mandate. This could enable the U.S. to impose comprehensive reforms over a period of at least a decade, but any U.S. administration, Democratic or Republican, would be highly reluctant to exercise this option because of the political, financial and human costs involved.
All of this means that oil and gas investors and executives focused on the Middle East should be prepared for a highly turbulent near- to medium-term future, and should do all in their power to champion judicious rhetoric and behavior from political actors on all sides in an effort to focus them on positive-sum solutions.
Sectarian strife in the Middle East poses serious risks to oil infrastructure in the Gulf region.
Recommended Reading
Cibolo Energy Closes Fund Aimed at Upstream, Midstream Growth
2024-09-10 - Cibolo Energy Management LLC closed its second fund, Cibolo Energy Partners II LP, meant to boost middle market upstream and midstream companies’ growth with development capital.
ONEOK Offers $7B in Notes to Fund EnLink, Medallion Midstream Deals
2024-09-11 - ONEOK intends to use the proceeds to fund its previously announced acquisition of Global Infrastructure Partners’ interest in midstream companies EnLink and Medallion.
Upstream, Midstream Dividends Declared in the Week of July 8, 2024
2024-07-11 - Here is a selection of upstream and midstream dividends declared in the week of July 8.
Dividends Declared in the Week of July 22
2024-07-25 - Second quarter earnings are underway, and companies are declaring dividends.
Dividends Declared in the Week of Aug. 2
2024-08-02 - Here is a selection of dividends declared for the week of Aug. 2 for a selection of upstream, midstream and service & supply companies.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.