Saudi Arabia Contagion Triggers Gulf Rout
THE DAILY TELEGRAPH: Fears of sectarian uprisings in Bahrain and Saudi Arabia have set off the first serious wave of investor flight from the Gulf, compounding market turmoil as civil war in Libya pushes Brent crude over $116 a barrel.

Saudi Arabia’s Tadawul stock index has tumbled 11pc in wild trading over the past two days, led by banks and insurers. Dubai’s bourse has hit a 7-year low.

The latest sell-off was triggered by the arrest of a Shi’ite cleric in the Kingdom’s Eastern Province after he called for democratic reforms and a constitutional monarchy. The province is home to Saudi Arabia’s aggrieved Shi’ite minority and also holds the country’s vast Ghawar oilfield, placing it at the epicentre of global crude supply.

“Unrest in this region can have fatal consequences for the world,” said JBC Energy. “The plunge on the Saudi stock exchange can be interpreted as a sign of waning trust.”

In Bahrain, the island nation’s Sunni elite holds sway over a Shi’ite majority that is denied key jobs and has a token political voice, making it a trial run for Saudi Arabia’s near-identical tensions in the Eastern Province.

Bahraini dissidents have so far been much bolder, prompting a bloody crackdown last month when at least seven people were shot by the military. The ruling family – under intense pressure from Washington to stop the killings – has since held out an olive branch to protesters and let the radical Haq leader Hassan Mushaima return from exile, yet the crisis is far from contained.

My Mushaima said on Wednesday that protesters have “the right to appeal for help from Iran” if Saudi military units interfere in the struggle. Tanks were seen crossing the 17-mile causeway from Saudi Arabia to Bahrain on Tuesday.

“These were supposed to be Bahrain’s tanks returning from Kuwait: that is not a credible story,” said Siras Abi Ali, a Gulf expert at the risk group Exclusive Analysis.

He said the outcome in Bahrain will set the template for events across the border. “There is no good outcome from this for Saudi Arabia. If Bahrain offers concessions, the Saudi Shia will demand similar concessions. If they crack down, they risk an uprising. These people do not want to live under the House of Saud,” he said. >>> Ambrose Evans-Pritchard, International Business Editor | Wednesday, March 02, 2011

If the Saudis Revolt, the World’s In Trouble
THE DAILY TELEGRAPH: The fate of the global recovery rests on events in Riyadh, says Jeremy Warner.

Be careful what you wish for. After an ambiguous start, Western leaders have broadly welcomed the wave of protest and revolutions sweeping North Africa and parts of the Middle East. But beneath the words of encouragement about people taking charge of their own destiny, there is a growing and vital concern – the security of our oil and gas supplies.

The West’s complicity in supporting the autocratic regimes that characterise many of the big oil-exporting nations is in part explained by the fact that, whatever their sins, they did at least seem to provide stability in the energy markets. That stability, however, has been thrown up in the air by the wave of protest sweeping the region.

Initially, it was assumed that there was a difference between oil-poor Arab nations such as Tunisia and Egypt, where the uprisings have been as much about living standards as anything else, and the much richer Gulf states. That theory was swiftly proved wrong.

In Saudi Arabia, even King Abdullah’s panicky decision to order another multi-billion-dollar splurge of spending on education, healthcare and infrastructure may not be enough to buy off the opposition. People seem to want something more precious than money: freedom. >>> Jeremy Warner | Thursday, February 24, 2011

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€90bn Irish Bailout Ends in Turmoil – Now Europe Fears Crisis Will Spread
THE GUARDIAN: Brian Cowen defies calls for resignation / Fears that Portugal and Spain may need aid / International rescue plan does little to calm markets / Datablog: how will the bailout be funded and how exposed is each economy?

Markets thrown into ­turmoil amid fears of a collapse in Ireland’s ­government. Photograph: The Guardian
Financial markets were thrown into turmoil today amid fears that an imminent collapse of Ireland's beleaguered government would have a knock-on effect across the eurozone.

The announcement of the potential €90bn international bailout for debt-laden Ireland – of which the UK could contribute up to £10bn – offered only a temporary respite to nervous markets.

By tonight, concerns that Portugal and even Spain might also need their own rescue packages were rising and sent the euro and shares falling while the risk of holding the debt of potentially vulnerable countries rose alarmingly.

After a tumultuous day in Dublin, where protesters tried to storm the parliament building, the prime minister, Brian Cowen, defied calls for his resignation but conceded he would call an election in the new year. The move was forced upon him after the Green party pulled out of his fragile coalition government, unnerving markets on a day which was supposed to restore confidence in Europe's decade-old single currency.

Instead there was a sense of growing unease in the markets amid evidence that investors felt Portugal would not survive without aid., Dealers said sentiment in the markets was reminiscent of the days after the collapse of Lehman Brothers in September 2008. Read on and comment >>> Jill Treanor, Nicholas Watt and Henry McDonald in Dublin | Monday, November 22, 2010