The Mid-East turmoil is not over, and, most likely, has only begun. The revolt in Tunisia spread to Egypt, and now Libya, a nation that produces 2% of the world’s oil. There have also been demonstrations in other Arab nations such as Bahrain, Yemen, Algeria and Iran. Others may be next. History tells us that revolutions of this type are contagious once the first nation shows what could be done. This was true hundreds of years before the age of the internet and cell phones, and is therefore even truer today.
We also know that revolutions seldom end in benign fashion and that violence and chaos are more the norm. This is particularly valid in the Mid-East where revolts have never ended with the formation of stable democracies. It is therefore likely that turmoil in this section of the world will continue for some time with unpredictable results.
As a result of this unpredictability and the extremely small chance of a quick and benign outcome, oil prices have already soared and will remain high and volatile for an extended period of time. Libya produces 2% of the word’s oil, an amount that could probably be replaced by Saudi Arabia within a reasonable period. What is particularly worrisome is that demonstrations in largely Shia Bahrain could spill over into neighboring Saudi Arabia, whose provinces bordering Bahrain produce most of its oil. This area also contains most of the minority Shia in a mostly Sunni country. In addition Bahrain’s rulers are Sunnis as well. Therefore it is easy to see that the potential for trouble is not insignificant.
