The Oil Weapon is Unleashed against Iran

Tuesday February 13, 4:50 am ET

Gary Dorsch (Global Money Trends) submits: Crude oil has become a key weapon in the battle between Saudi Arabia, Kuwait, and the UAE, aligned with the United States, against the mullahs of Iran. The Arab Oil kingdoms fear the emergence of a Tehran-led axis linking Iran, Iraqi Shiites, Syria, Lebanon’s Hezbollah, Palestinian Hamas in Gaza, and Islamic militants linked to al Qaeda trying to topple the Saudi royal family.

Earlier this month, Riyadh fired the first shot in the war against Iran, by knocking the price of crude oil to as low as $50 per barrel. The goal is to squeeze Iran’s budget and wreck havoc on its economy, as much as possible, before the mullahs can get their hands on the nuclear bomb. According to a Jan 24th report in the UK Telegraph that indicated North Korea is helping Iran to prepare an underground nuclear test similar to the one Pyongyang carried out last year.

Under the terms of a new understanding between the two countries, the North Koreans have agreed to share all the data and information they received from their successful test last October with Teheran’s nuclear scientists, to assist Teheran’s preparations to conduct its own test, possibly by the end of this year.

On January 24th, the Saudi All Share Index [SASI] closed below the 7,000 level for the first time in two years, and trying to find a bottom. The specter of a nuclear armed Iran is sinking SASI, while lower oil revenue dries up market liquidity. Until SASI shows concrete signs of a bottom, powerful spike rallies in crude oil might fizzle out, with Riyadh trying to apply overhead resistance with excess supply.

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