The grand bargain between the US, Israel and Saudi Arabia is already a dead letter. This has large implications for oil at a time when the crude market is already in deficit and prices are at the upper band of their historical range – pushed higher by Saudi and OPEC production cuts of two million barrels a day (b/d), otherwise known as cartel price manipulation.
The unspoken terms of the deal were that Saudi Aramco would feed back one million b/d as a unilateral gesture. But this depended on Israel beefing up the Palestinian Authority on the West Bank, one reason why Hamas was so determined to thwart it. The accord is now almost unthinkable.
One can only assume that Hamas intended to provoke total conflagration by decapitating women and children in the worst massacre of Jews since the Holocaust. Events must now follow their Sophoclean script with a haunting inevitability.
There must be a high risk that the unstoppable chain of events will trigger an assault by the Lebanese Hezbollah, backed by Iran and armed with 150,000 missiles on the northern Blue Line, in turn spreading to Syria. Israel bombed Damascus and Aleppo airports in a preemptive strike on Thursday. “The longer the war, the greater the probability that Hezbollah joins in,” said Dr Walid Abdel Hay, a Jordanian political analyst.
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We are one miscalculation short of a Middle East firestorm and the next world #oil crisis, Ambrose Evans-Pritchard writes: The strange calm on world oil markets is unlikely to survive blockade of Gaza. The only way to knock out Hamas is house-to-house, block-to-block, urban… pic.twitter.com/ZhFXBl0zo4
— Holger Zschaepitz (@Schuldensuehner) October 14, 2023