Saudi Arabian Forces Move Into Bahrain

In order to quell additional Shiite uprisings in Eastern Arabia, the Saudis have moved military forces into Bahrain.  This is significant because it has been believed that Iran was taking advantage of the “calls for Democracy” to instigate a Shiite revolution against the Sunni leadership of Bahrain.

Bahrain, though very small, sits next to one of the largest oil fields in the world, occupies one of the largest oil export points, and houses large numbers of U.S. naval forces.  Iran was trying to covertly surround its hated rival, Saudi Arabia and to establish a geographical base and continuing irritant to the Saudis.  In response, Saudi Arabia has sent in military forces.

This move forces Iran’s hand and likely signals the end to many of the Middle Eastern fires that have been started since late January.  The reason is that for Iran to continue its campaign it would have to escalate the situation beyond covert to overt.  That would likely draw an overwhelming response from the international community, including the United States, Europe, Russia, China and India.  The Iranians may have made many geopolitical gains in the last several years (witness their domination of Iraq), but they are not even close to powerful enough to take on every major power in the world.

I will continue to monitor the situation closely, but essentially this is the beginning of the end of the Middle Eastern crises that have engulfed the Persian Gulf and North Africa for the past two months.  In all likelihood, this also means that oil prices are going to begin stabilizing.  Depending on the increased need for oil in Japan, this may also mark the peak for oil prices in the near term and its likely that prices will begin to fall.

Jason