Archive for: January 2016

Markets Are Fearing Iran’s Economic Return

For many investors, oil makes up a big chunk of their investments. Oil recently fell in value due to overproduction. Iran’s re-entry into the global oil market spells doom for Saudi Arabia, Dubai and other oil producing countries.

Investors both rejoiced and feared at the less-than-$30-a-barrel of oil.

Oil isn’t the biggest issue for many analysts. The country’s vast natural resources and a huge population of young consumers would upset the balance of supply and demand in the global market today.

On Wednesday, oil had extremely dropped in value upon the opening of the market. The US Dow Jones industrial average closed down by 1.56% after it failed twice earlier the same day.

Analysts view the US energy industry is the one to suffer heavily from the oil price drop from Iran. North Dakota and Texas are to suffer immensely with companies making u-turns in investments and costs as overproduction bears down on the industry.

However, lower oil prices could mean US consumers’ activities may increase. Consumer spending increases can help propel the US economy at a significant but limited rate.

Iran’s 30% population of investors ranging from 65 dollar-millionaires to 4 dollar-billionaires may also contribute to the US luxury properties market. As they are expected to improve the value of London’s properties, analysts said that for the US and Europe, property markets may improve the same manner Singapore and Hong Kong investors improved real estate in many Western countries.

Middle East Tensions Spark Sunni-Shia Historic Conflict in Region

For thousands of years, Sunni and Shia Muslims have failed to find a compromise between their beliefs. Most forces behind the Arab Spring have stemmed from oppressed Sunni or Shia Muslims ruled by opposing parties. The revolutions have swiftly returned to a certain normalcy, only replaced by the majority party that won during the Arab Spring.

Sheikh Nimr al-Nimr, a driving force behind the Arab Spring of 2011, was executed by Saudi Arabian Authorities. The Sheikh was a Shia Muslim, which Iran strongly upholds. Iran had condemned the execution. Meanwhile, Sunni Muslims in Saudi Arabia support its decision to execute the Sheikh.

The sectarian division has the same single God named Allah. Both use the Quran and have similar verbal records of the Prophet Muhammad’s teachings. however, due to believers’ disagreements to the successor of Prophet Muhammad in the 7th Century, conflict broke out between the two Muslim parties.

Shia Muslims are only 10 per cent in the Middle East and are about 100-250 million in the world. Shia came from the shi’atu Ali, who believed Ali ibn Abi Talib, Mohammed’s cousin and son-in-law is eligible for leadership.

Sunni Muslims believe that Ahl al-Sunnah belive the caliphate should succeed Muhammad’s bloodline. Sunni Muslims have a bigger population in the world with 1.5 billion, making up 90 per cent of the religion.

Religious belief and sectarian divide is stronger than a country’s borders in the Middle Eastern region. This was proven by sectarian tension in the 70s with the Iranian revolution and the Afghan War.

The sectarianism, according to analysts would only worsen in the coming years.