What does Saudi Arabia's participation in the Annapolis talks mean?
Can Saudi Arabia hack together a Sunni alliance (with Israel as honorary Sunnis) to counter the Middle East Shiite alliance? Is a hot war likely to ensue?
If so, oil will hit at least $200 per barrel, and the American economy will be in the tank. If that happens, then the dollar will cease to be the international reserve currency, to be replaced by the Europe. Since the Sunni nations in the Middle East have their international reserves in petro-dollars, then those nations will take a major hit in the nest egg. China faced that same problem with the dollar.
But Russia will suddenly be the new rich man on the block and able to really throw their weight around in Europe and the Middle East. How likely is a Russia - Iranian alliance?
Pakistan will be in chaos, as it seems to be headed that direction already.
Emptywheel at the Next Hurrah throws out many of these questions and her commenters address a lot of them.
In my opinion, the oil producing nations of the world appear to be well on their way to dominating international trade because of the value of oil. The European Union, as a highly productive industrial economy which has already adjusted over the years to having relatively little oil well have industrial products to sell. Since the U.S. is a heavy oil-consuming nation, we are likely to be mostly just sitting on the sidelines hoping someone will have pity on us.
The severity of America's problems is going to be a lot worse than it would have been had Cheney and Bush not attempted to substitute military power for diplomacy, economics and heavy doses of research into alternative fuels.
Go read Emptywheels discussion and see what you think.
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