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Oil Spikes after Jet Strike

Walter Russell Mead

In the last few days and hours, events have offered a rude lesson in just how interconnected the world is—threats included. Far from being able to keep problems in the Middle East “contained,” the West has seen them spill over into Paris and Brussels. And now, an entirely foreseeable Russo-Turkish spat has all of NATO on edge, and has sent oil prices soaring. The Wall Street Journal reports:

Oil prices rose on Tuesday after the Turkish military shot down a Russian jet fighter along the Syrian border and the dollar weakened.

Prices remain near six-year lows as concerns persist about robust crude production and the potential for weaker demand next year. However, Tuesday’s price gains highlight that geopolitical risks can still jolt the oil market, as traders worry that production in the Middle East could be interrupted.

“News of a military jet crashing in Syria is a reminder that there is still substantial risk in the Middle East,” said Bjarne Schieldrop,commodities analyst at SEB Markets.[..]

Light, sweet crude for January delivery rose $1.27, or 3%, to $43.02 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose $1.37, or 3.1%, to $46.20 a barrel on ICE Futures Europe.

President Obama’s pivot away from the Middle East was only possible because of his belief that what happened in the Middle East could stay in the Middle East. But we are seeing both with terrorism and now with the possible connection between Middle East crisis and oil prices just how false that belief is, unfortunately. And going forward, we might expect hostile forces in the region to try to exacerbate the problem: In all likelihood, the one long-term goal that Russia and Iran have in common is to push up oil prices—a huge win for both countries. (See Maria Snegovaya’s analysis of recent Russian behavior for a smart, speculative take on this very point.)And the interconnected nature of our problems is not just economic. Just in time for Thanksgiving and Christmas, the United States has issued a new worldwide terror advisory that, in its breadth and detail, encapsulates much of what has gone wrong in foreign policy in the last few years:

In issuing the advisory, the US State Department cited recent terrorist attacks in Egypt, Lebanon, France, and Mali. It came as Brussels remains in lockdown under what authorities say is an imminent threat.

“Current information suggests that ISIL (aka Da’esh), al-Qa’ida, Boko Haram, and other terrorist groups continue to plan terrorist attacks in multiple regions,” the US warning said. “Authorities believe the likelihood of terror attacks will continue as members of ISIL/Da’esh return from Syria and Iraq.” It warned, in particular, of attacks against public gatherings.

The pronouncement, on the eve of Paris, that ISIS was “contained” was just the latest in a long series of Administration statements, stretching back to the declaration of the Afghanistan surge, predicting the imminent collapse of America’s foes just before they became bigger problems than ever. Words like “on the run,” “decimated,” “JV,” and “contained” testify to persistent and recurring errors in assessing progress in what was once called the War on Terror. President Obama has never given a serious public account of just why his estimates of the strength of America’s enemies, and his predictions about their future activities, have been so frequently and flagrantly wrong. Nor has he said anything about what he’s learned from these mistakes and how he intends to get a better grip on the problem in the future.

Fear about the President’s inability to keep the country safe is a major factor in the ugly wave of nativism and xenophobia now coursing through the body politic. The terror attacks around the world, the actions of Russia, and the threats to U.S. travelers are all part of a dynamic that’s having a deeper impact on the public than the President perhaps has yet come to understand. When people are afraid, and no longer trust their leaders to understand or to take appropriate steps against an external threat, then demagogues gain power and influence.

The toll that President Obama’s failures as a war leader are taking on the nation is growing: not just the damage that the terrorist attacks do, nor the increasing, under-appreciated strain on the world economic system from unaddressed global threats, but also the corrosive effects of fear and lack of trust in our national leadership.

From Russia to Iran to ISIS, President Obama has persistently misread the motives and failed to predict the moves of his opponents. The consciousness of his failure is slowly settling into the nation’s awareness, beginning perhaps with those who never placed much trust in him, but spreading to wider and wider circles. With more than 400 days left in office, and many shocks likely to occur between now and then, President Obama needs to think, hard, about how he can regain the confidence of more Americans that he understands the dangers we confront and is ready and able to deal with them.

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