In case no one noticed it, the tensions in the region are almost unbearable. Egypt is near financial collapse. Syria already has collapsed. Hezbollah was drawn deeper into Syria’s civil war as 28 fighters from the group were killed and dozens more wounded while fighting rebels, opposition activists said Monday. Russia is moving its fleet of war vessels into the sea off of Lebanon. Well you might say there is no oil there so it doesn’t matter. But it all seems to be connected in this cauldron of religious tensions and cultural mistrust. Iraq, the big prize is rapidly deteriorating. A wave of attacks killed at least 95 people in Shiite and Sunni areas of Iraq, pushing the death toll over the past week to more than 240 and extending one of the most sustained bouts of sectarian violence the country has seen in years. Iraq is the 3rd largest exporter of oil in the region and turmoil there will definitely have an impact on global oil price.
There will be an election for President in Iran on June 14th. It’s a farce of an election because the Supreme leader there calls all the shots including who can even run. None the less, expect the unexpected with Israel willing to tighten the screws on the Iranian nuclear bomb program. The International Energy Agency expects weaker demand growth for oil in 2013, along with higher supply. With all the talk of the glut of oil developing in the U.S., the Middle East seems an unstable source of supply that could put a quick end to the conversation.
