​A couple of days ago, we posted something called “The Saudi Purge: What Are The Implications For Oil?”

Yes, “what are the implications for oil?” That’s a good question, and it’s one a lot of people are still trying to answer. The gist of that post was that you can’t really try and separate the Saudi purge from escalating tensions between Riyadh and Tehran. And you certainly can’t separate those tensions from the proxy wars in Yemen and Syria. There were two events over the weekend with direct implications for those wars: flying Houthi missiles and the resignation of Saad Hariri in Lebanon, with the latter event clearly designed to aggravate Hezbollah whose efforts to prop up Assad in Syria have bolstered the group’s reputation (although “reputation” might be something of a misnomer there). Here’s WaPo on Lebanon:

The Israelis seem ready to fight Hezbollah, the Saudis are eager to use Lebanon as a battleground to deliver a blow to Iran, and the Americans want to curtail Iran’s influence through economic sanctions against its proxies. Hariri’s abrupt resignation in effect denies Hezbollah a strong Sunni partner and an effective cross-sectarian National Unity government.

So when you think about the implications for oil, this is a little more straightforward than a lot of people seem inclined to believe – or at least in the near-term. MbS supports the production cuts and is a foreign policy hawk. Taken at face value, that combination should be bullish.

Throw in the fact that MbS has the opportunity to curry favor with the Trump administration by taking a hyper-aggressive approach to curbing Iranian influence, and one would be inclined to believe that we’re in for a prolonged period of rising tensions.

Ok, so Goldman is out on Thursday taking a stab at documenting what they’re calling “a sudden further rise in geopolitical tensions,” and while I most assuredly do not agree with the use of the term “unrelated” in what you’ll read below, this is at least a handy summary of recent events, events which, don’t forget, include a truly ridiculous debt “restructuring” effort in Venezuela (and the scare quotes are there for a reason). Here are Goldman’s bullet points…