Weekly Geopolitical Report – The Saudi Executions (January 11, 2016)

by Bill O’Grady

On January 2, Saudi Arabia executed 47 people accused of various crimes against the state.  Of this unfortunate group, 46 were Sunni jihadist radicals and one was a Shiite cleric, Sheik Nimr al-Nimr.  Al-Nimr’s execution set off protests in Iran and the Saudi Embassy in Tehran was sacked.  In response, the Saudis broke off diplomatic relations with Iran for the first time since 1980.  Several other Sunni nations have either followed Saudi lead in breaking off relations or have recalled ambassadors in protest.

These executions are the result of several important trends and factors that are affecting Saudi Arabia, specifically, and the Middle East, in general.  In this report, we will discuss the executions and the signals they send.  We will also analyze the transformation occurring in the Middle East and the Saudi response.  As always, we will conclude with market ramifications.

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