If there is one risk that seems to have been overlooked by the marketplace is this: a potential escalation of Middle East tensions.
The Reuters reports,
Shi'ite-ruled Iran sent a flotilla to Bahrain on Monday to show solidarity with mainly Shi'ite Muslim protesters, escalating tensions with the island kingdom that is home to the U.S. Navy's Fifth Fleet.
It was not clear when the convoy might reach Bahrain, which has a majority Shi'ite population but is ruled by a Sunni king.
Bahrain, which has cracked down on pro-democracy protesters in recent weeks, has criticised the decision to send the flotilla and accused non-Arab Iran of interfering its affairs.
Iran's English-language Press TV said 120 activists, including professors, students and clerics, were aboard the convoy, sent to condemn the killing of Bahraini protesters.
The MENA unrest has earlier spread to Bahrain from which Saudi Arabia earlier sent troops to help quash the mounting opposition.
Kuwait has likewise declared in the same article that
“Kuwait will not hesitate to defend the Kingdom of Bahrain against any danger that may threaten its security," the al-Watan daily quoted an unnamed senior Kuwaiti source as saying.”
Ruling autocracies has been linking arms in the face of growing dissent from her constituencies.
Moreover this isn’t about Christian-Muslim conflict but about Muslim inter-religious or sectarian schism. The point I would to make is for those who tunnel on the view that the world operates as religious black and white conflict, obviously this isn’t one of them.
In addition, the Bahrain episode is more of a consequence of foreign meddling on what is a local political disorder. And the meddling of Saudi Arabia has similarly triggered a counter response: Iran implicitly applies symbolical intervention by sending a flotilla.
What used to be a local problem has now gravitated to a regional predicament a risk I earlier pointed out.
We hope that this won’t turn into a full scale conflagration, because if it does, there will be much turmoil especially in the energy markets.
This is one development that requires vigil.