Egypt trading oil relations with Saudi for Iraq

Egypt is wrenching itself from Saudi Arabia's orbit.

Saudi Arabia still believes that Bashar Al-Assad, the dictator of Syria, must be removed for a settlement in Syria. However, most regional players now support Assad and do not want to see him removed - Egypt and Turkey are two prominent examples.

This policy has caused a sticking issue between Egypt and Saudi Arabia. Egypt's priority is stability and preventing terrorism from increasing, whereas Saudi's priority is curbing Iranian influence. In Syria, Iranian influence and stability collide.

As a result, Saudi suspended oil imports into Egypt for six months. And this has caused Egypt to look to Iraq for oil imports.

This is great news for Iraq and terrible news for Saudi. I have long since maintained that the world is going to look increasingly to Iraq for oil over and above Saudi Arabia, and that we are likely to see a reversal in stability and instability between the two countries depending on level of healthy oil exports.

As for Iraq, she really needs Egypt's alliance. Iraq desperately needs to have its military trained up, and the Egyptian army is a great example of what a powerful Arab military can look like. Egypt can buy Iraqi oil and in exchange assist Iraq with increasing counter terrorism capabilities.

I see that in the future, Egypt will have great relations with Arab nationalist countries like Syria and Iraq, as well as with smaller Arab countries like Jordan and Libya, and a smaller level of rapprochement with Iran, while Egyptian-Saudi relations will completely deteriorate.

This represents a realignment for Arab nationalist countries closer to Iraq than Saudi Arabia. While this is great news for stability in Iraq, this increases the likelihood of Saudi Arabia being vulnerable to economic crises and civil war, which also means more ISIS and more terrorism for the Arabian Gulf.