Iraq Breaks Down, Oil Surges
The situation in Iraq is serious, and is probably going to get worse before it gets better. The potential for this recent action to morph into a regional conflict is very high. That that means that oil could go a lot higher, and if it does, we can expect the odds of a global economic recession and an attendant financial crisis to go up considerably from here.
Before we dive into what's actually happening over there right now, I need to begin with a longer and deeper historical context of the region, which is essential to understanding pretty much everything in the Middle East. The western press likes to report on things as if they suddenly occur for no discernible reason, context-free and unconnected to our actions and activities over there. But the story of the Middle East is a story of intense external meddling -- especially by the US, recently.
Further, I happen to hold the view that when an entire population resorts to violence, it's a sign that they feel they have no other options or opportunities. Whether it's a financially-strapped fired US employee lashing out at their former bosses and co-workers, or an Arab youth raised in utter poverty deciding that military extremism makes sense, I see the same dynamic at play.
People, like animals, when cornered will take whatever path remains for them to escape. If left with no other paths besides violence, then violence is what you get. It's not really all that hard to understand, and yet the US media goes out of its way to try and frame violent unrest as some form of inexplicable evil that magically appears for no good reason.
Well, there are plenty of reasons why violence exists in the Middle East is violent (and has for a very long time). And most of those have to do with resources, and their exceptionally scarcity in a desert environment.
Of course, the Middle East isn't unique in this. For instance, the early European Viking raids and endless wars between the European kings during the middle ages were all essentially resource wars. To understand the reasons for war -- both ancient and modern -- you need to start with resources.
So whenever I hear terms like 'radical militants' or 'Jihadists' or even 'terrorists', what I hear instead is 'people with poor resources who believe they have no other options.' The unpleasant truth that threatens the dominant western narrative is that all humans, if they have access to sufficient resources and opportunities, are generally peaceful. By the time an entire population has been 'radicalized', the causal problems have been simmering for a long time and, as a result, will not be easily remedied.
Iraq Is Not Really A State
To start this story, we have to go back to the period just after WW I when Britain and France were divvying up the spoils of the region between themselves.
Iraq did not exist prior to these two western powers taking out a map of the Middle east, a ruler and a pen, and summarily drawing straight lines that happened to rather inconsiderately cut across cultural, language and racial boundaries. The architects of this secret agreement were a Brit by the name of Sykes and a Frenchman by the name of Picot.
Prior to this Franco-British interference, the area was called Mesopotamia and had long been ruled by a contentious but roughly-balanced mixture of tribes and kings.
Here's the old Mesopotamia in green as compared to the borders drawn by Sykes & Picot:
To understand the current conflict, you have to understand the history of the borders, how they were drawn, and the extent of western plundering and meddling -- which began long before the Bush Iraq wars (I & II) began.
It bears mentioning that the area the French and British allotted to themselves was already fully-populated by the people who lived there. However the area was already determined to be rich in oil and other commodities, and both colonial powers were well-practiced at the art of dividing and conquering local people in order to take their resources.
For the people of Mesopotamia, western resource plundering has only accelerated since the arbitrary lines that comprise the 'state' of Iraq were drawn.
Of course, it's quite likely that Iraq's border were specifically drawn to cut across ethnic boundaries and thereby assure a failed state, because Britain had learned through history that failed states were the easiest to control. This was their preferred MO in India and numerous other colonies, and by 1916 it was a more or less perfected tool of statecraft.
But whether it was ineptitude or malign intent, the fact remains that Iraq was never a logical geographical entity; and its natural state would be to split into three autonomous regions: Kurds to the north, Sunnis to the west and Shiites to the south.
As a quick reminder, the differences between Sunni and Shiite Muslims stems from a split made shortly after the prophet Muhammad died in 632:
The reason it's important to know the differences between the two main forms of Islam involved is because the balance of power is split across the Middle East is based on which form dominates a given area.
Saudi Arabia is almost entirely Sunni and has been supporting the rebels in Syria and, by extension, in the rebels now in Iraq as well. Iran, on the other hand, is Shiite, as is most of Baghdad and southern Iraq.
The awkward part of this story is that if the US does get involved to help Baghdad out militarily, it would mean fighting on the same side as Iran (and against the forces the Saudi Arabia supports):
No wonder Washington is hemming and hawing! There's no way for Obama to send support to Baghdad without undercutting a lot of carefully laid anti-Iranian propaganda. What, we're going to be fighting on the same side now as our longtime "Death to America!" adversary? Politically this is a real pickle.
But such an unnatural alliance may be happening:
A bit ironic to be sending the USS George Bush, but there you have it. Once again, the US is poised to deliver more military solutions to what are, at heart, political problems.
As I've posted before, I think that sending your biggest ships into the the Persian Gulf bathtub is an outdated tactic that will not last long if/when modern anti-ship missiles are brought into that theater, such as the very impressive Yakhont-800 supersonic anti-ship cruise missile:
The truly awkward part for US foreign policy here is that Iran could likely come out of this with even more influence over Baghdad -- possibly even enjoying a permanent 'protector' role until or unless some other entity wants to step up to the plate and commit to the job.
Mission Accomplished? That's going to go down as one of the most premature declarations of all time. More like Missing Accomplishment, if you ask me.
A Lightning-Fast Advance
The situation in Iraq developed fast and continues to move quickly.
Allegedly, nobody saw the rebels from the Islamic State of Iraq and the Levant (Isis) coming. "There was no warning".
I find that doubtful given all the tools of State right now, but whether warnings were ignored or not, ISIS has moved incredibly fast seizing one city after another as they've spread southards:
Somehow, ISIS rebels numbering in the hundreds, or perhaps low thousands, have managed to rout two full Iraqi brigades numbering some 30,000 troops from their positions and send them fleeing. That tells you everything you need to know about the esprit de corps of the Iraqi 'army.' It's not an effective fighting force at the moment.
Now we get to the second awkward part of this story for the US. Along with Saudi Arabia, the US has been supplying weapons and training to the Syrian rebels many of whom are now heading south towards Baghdad.
To fight them would essentially mean fighting our own weapons and training.
I'm really impressed with the ability of the US news industry, such as in the article above, in keeping out the extremely obvious connection between the hard line Syrian rebels we are supporting and the ISIS rebels now heading south.
After all, it's not like the news is hidden, or only located on the fringe of the blogosphere. It's been widely reported for over a year that the US has been providing high level training and weapons to the Syrian rebels. Note that this next article from the Washington Post is over 9 months old:
Even more recently, it's been reported that the US has provided high tech anti-tank and anti aircraft weapons systems and training. This is state-of-the-art warcraft for ground troops:
And PBS recently weighed in with a documentary on the matter, describing training in Qatar which disturbingly sounds a lot like instruction in how to commit war crimes:
At Risk: MUCH Higher Oil Prices
The summary here is that the 'rebels' the US is supporting in Syria are part of the very same group that is now headed towards Baghdad. They are all Sunni hard liners and they will not rest until they have created a new Sunni state for themselves.
It's really that simple.
What's not simple is understanding what the US' motivations are here in wanting to topple so many regimes in the Middle East and North Africa. Is it to appease our Saudi allies who also support Sunni causes across the region? Is it to create an entire region of failed states because that serves some larger master plan?
Most importantly, did the US really think that we could both arm the Sunni rebels and support the brutal Shiite hard liner al-Maliki (the current president of Iraq) in Baghdad as he consolidated Shiite power at the expense of the Sunnis? Why arm and support both sides, unless the goal was a bloody and protracted stalemate?
At any rate, US foreign policy is again in tatters and if it seems like there's no solid plan here, perhaps that's because there isn't one. It's either a really complex and genius plan or intense bumbling and stumbling. Sometimes it's hard to tell these things apart.
There was practically no chance of Iraq holding together after the US destroyed the country and then left it without any functioning state apparatus strong enough to withstand 14 centuries' worth of carefully-nurtured resentments in a harsh land with little going for it beyond the oil that will someday be gone.
At any rate, we'll just have to keep watching as all this develops. In the meantime, the biggest risk here is that this becomes a wider regional war. One that begins by enveloping all of Iraq and which cuts off that countries oil exports for a while.
In Part 2: Oil At Risk, we lay out the very real and growing risk that a coming decrease in Iraq oil exports created by the current turmoil will result in an oil price spike that could approach $150 per barrel (or even worse under certain situations). Such a development would almost certainly plunge the global economy back in to Recession and financial crisis. We address the defensive steps concerned individuals should take now in advance of such a highly undesirable turn of events.
Click here to access Part 2 of this report (free executive summary, enrollment required for full access)
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June 25th, 2022
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