Crude prices dropped 4% in the hours after Bush announced that US ground forces would counter the Shiite militias and the US Navy would be stationing an additional carrier battle group off Iran (Surging total force numbers way beyond 20K or don’t sailors count?).
Given that the war premium in the oil price could be expected to escalate with the war’s escalation, a price REDUCTION might seem puzzling. Or not. It looks as if the Saudis are flooding the market to limit Tehran’s revenues. Saudi Sunnis want to contain Persian Shiites and destabilize Iran’s domestic politics. Or did the Saudis opened the oil spigot merely as a thank-you gesture for Bush’s tilt towards the Iraqi Sunnis?
Are we hearing the opening economic shots in a regional sectarian war? A war we are supposedly “surging” to forestall?