Three Flashpoints to $220 Oil
By Byron King
With oil sitting comfortably at $73 a barrel this morning, we cast a nervous eye toward the Middle East…where three little-noted developments are setting the stage for a return to triple-digit prices. Maybe very soon.
1) On the surface, this looks like a pretty routine Iraq story: An ambush there yesterday killed six members of a Sunni militia known as the “Awakening Councils.”
But the background the media didn’t supply makes this much more interesting – and ominous. See, the Awakening Councils are Sunni Muslims the US government paid off in 2007 so they’d stop shooting at US troops.
This was part of Gen. David Petraeus’ “surge” strategy: He promised the militiamen that in return, they’d get a seat at the table in Iraq’s new government, dominated by Shia Muslims. Problem is, Petraeus never got the Shia to buy into this.
What’s more, Iraq’s new Shia leaders have close ties to Shia-dominated Iran; in fact, several of them lived there in exile during Saddam Hussein’s rule. Our eyes perked up a bit at the location of the attack yesterday – within spitting distance of the border.