TIME energy

Oil Prices Spike After Saudi King’s Death

King Abdullah waves as he arrives to open a conference in Riyadh.
Zainal Abd Halim—Reuters King Abdullah waves as he arrives to open a conference in Riyadh on Feb. 5, 2005

Last month, Saudi Arabia pumped 9.5 million oil barrels a day, but uncertainty clouds the future of oil prices

Oil prices spiked following the death on Friday of Saudi Arabia’s King Abdullah, whose country’s oil production is the largest of any state in the 12-member Organization of Petroleum Exporting Countries (OPEC), a cartel responsible for approximately 40% of the global oil supply.

The monarch’s passing also increased oil futures in New York by 3.1 and London by 2.6, according to Bloomberg. As the globe’s biggest exporter of crude oil, Saudi Arabia helped maintain an OPEC production quota last year that helped keep oil prices low by ensuring a high supply of crude in the worldwide market. Prices nearly halved last year when OPEC’s output did not drop to reflect oversupply, as the U.S., the globe’s largest consumer of oil, pumped more oil than it had in over three decades.

“The passing of King Abdullah is going to increase uncertainty and increase volatility in oil prices in the near term,” said financial analyst Neil Beveridge in a phone interview with Bloomberg.

U.S. crude stockpiles jumped by 10.1 million barrels, its largest volume increase since early 2001, according to the Energy Information Administration’s reports up to Jan. 16.

Crown Prince Salman bin Abdulaziz succeeds King Abdullah, who helmed the kingdom for nearly a decade and significantly enlarged Saudi Arabia’s economy, which is now the largest in the Arab world in terms of total GDP.

[Bloomberg]

TIME Foreign Policy

Why Saudi Arabia’s Neighbor Is the Real Concern for the U.S.

Saudi Arabia's King Abdullah receives U.S. Defense Secretary Robert Gates at the king's Riyadh Palace on April 6, 2011 in Riyadh, Saudi Arabia.
Chip Somodevilla—Getty Images Saudi Arabia's King Abdullah receives U.S. Defense Secretary Robert Gates at the king's Riyadh Palace on April 6, 2011 in Riyadh, Saudi Arabia.

A smooth succession is all but guaranteed in the Kingdom — but that won't help imperiled U.S. allies in Yemen

King Abdullah of Saudi Arabia died Thursday of natural causes at age 90, leaving in place what appears to be a well-laid succession plan that U.S. analysts hope will assure continued stable relations between Washington and the oil-rich country that dominates most of the peninsula.

Unfortunately, in neighboring Yemen, the government of U.S. ally President Abdel Rabbo Mansour Hadi also died Thursday, leaving nothing but the prospect of a failed state and increased sway for Iran-backed Houthi rebels and a powerful and dangerous branch of al Qaeda.

On balance, the bad news outweighs the good.

Abdullah’s successor, Crown Prince Salman, is an established figure in U.S.-Saudi affairs, with a history of collaboration on national security matters dating to his fundraising for the Afghan Mujahedeen during their war against the Soviets in the 1980s, says Bruce Reidel of the Brookings Institution. One of Salman’s sons, Reidel reports, “led the first RSAF mission against Islamic State targets in Syria last year.”

But while oil futures soared on the news of Abdullah’s death as traders worried about potential instability in Saudi Arabia, former U.S. officials viewed the collapse of central governing authority in Yemen as the real cause for concern. “Rule number one of contemporary national security policy is allow the emergence of no new failed states,” says former State Department Coordinator for Counterterrorism, Amb. Daniel Benjamin.

The power vacuum is most worrying because it imperils U.S. intelligence and counterterrorism operations against one of the few al Qaeda off shoots that retains the U.S. as its primary target. Al Qaeda in the Arabian Peninsula (AQAP) has a talented bomb-maker in its upper ranks, a Saudi fugitive named Ibrahim al Asiri. U.S. officials believe al Asiri is behind several near-miss attempts to bring down Western airliners, at least one of which was foiled by a Saudi double agent who had penetrated the group.

The Houthis are only a threat to the U.S. insofar as they appear to have effected the ouster of the U.S.-backed Hadi and left a collapsed state in his wake. “We were banking on a guy who was very pro-American, but had far less support in his country than we thought,” says Whitley Bruner, a former CIA Baghdad station chief who previously served in Yemen and has worked as a security consultant there in recent years.

The Saudis dislike both the Houthis and AQAP, which dispatched al Asiri’s brother in a suicide attack that nearly killed the Saudi Interior Minister in 2009. But the kingdom has little chance of putting its neighbor back together again: with Yemen’s history of sectarian, tribal and ideological violence, “it’s going to get worse,” says Bruner. AFP reported late Thursday that “four provinces of Yemen’s formerly independent south, including its main city Aden, say they will defy all military orders from Sanaa” now that the capital has fallen to the Houthis.

TIME Saudi Arabia

Who Is Saudi Arabia’s New King?

Meet King Salman

King Salman is now ruler of Saudi Arabia after his elder half-brother, King Abdullah, died early Friday at age 90.

Salman bin Abdulaziz, who was named crown prince in June 2012, was Abdullah’s third heir to the throne after two elder brothers died in late 2011 and mid-2012. As the new King of Saudi Arabia, home to 28 million people, he will also serve as Prime Minister and Defense Minister.

A longtime governor of the capital, Riyadh, Salman has a reputation as a progressive and practical prince similar in bearing to his late brother. The transition is expected to be a smooth one, with little instability and no long-term policy changes. But the 79-year-old has reportedly been in poor health in recent years, and is perhaps unlikely to rule for as long as his elder sibling.

Unlike European monarchies that are handed down by generations, the Saudi throne has passed between the sons of King Abdulaziz, who founded modern-day Saudi Arabia in 1932. His sons Saud, Faisal, Khalid and Fahd each became king in the 20th century; Abdullah took the throne when Fahd died in 2005.

King Salman’s crown prince will be his younger brother Prince Muqrin, the youngest surviving son of King Abdulaziz, who was named deputy crown prince last year when the kingdom acted to set in stone its structure for the future. Muqrin is said, like the new King, to be committed to cautious reforms.

It was decreed by the King in 2006 that when the last of Abdulaziz’s sons passes away, a new King will be chosen from among his grandsons by a council of senior Saudi princes. Prince Muhammad bin Nayef, the son of a crown prince who died, is considered a leading contender after being appointed Interior Minister in 2012.

But the kingdom has never transitioned from one generation to another, and no one quite knows what will happen when it does.

Read next: King Abdullah’s ‘Special Relationship’ With the U.S.

TIME remembrance

King Abdullah’s ‘Special Relationship’ With the U.S.

Saudi Arabia's King Abdullah Dead
Getty Images U.S. President Barack Obama and Saudi Arabian King Abdullah laugh as they speak to the media after their meeting in the Oval Office of the White House, in Washington, D.C., on June 29, 2010

Read TIME's take on the Saudi monarch's relationship with President Obama

Saudi state TV reported Friday morning, local time, that King Abdullah had died at 90. The monarch’s health was a known concern last April, when TIME took a long look at the state of affairs between Saudi Arabia and the U.S., and the relationship between the King and President Barack Obama.

Though interactions between the two nations were showing signs of stress, they still provided a window into the world of the King:

The King requires a certain amount of TLC. “This is a very personalized relationship. It’s always the King and the President,” says Elliott Abrams, a former Bush White House national-security aide who has met Abdullah many times. The special relationship between Washington and Riyadh has endured since 1945, when Franklin Roosevelt met with Abdullah’s father Abdulaziz ibn Saud and established an informal deal: the U.S. provides for the kingdom’s security in exchange for reliable oil supplies. (History buffs will note that Roosevelt saw the King on his way home from the Yalta conference, held in Crimea.)

To this day, there is nothing quite like dinners with the Saudi monarch in his Riyadh palace. The King and the President are seated at the head of a massive U-shaped table, flanked by dozens of people, most of whom can’t see either leader because of the large flat-screen televisions that are placed in front of them. The King enjoys dining with his TV tuned to the news channel al-Arabiya, Abrams says.

That may not be Obama’s idea of a good time. But communication with the King, now 89, comes much more easily in person than the grouchy mumbling one gets from afar. “The King doesn’t like to talk on the phone,” says a diplomat who knows Abdullah. Despite such obstacles, Obama has maintained a workmanlike, if not quite hand-holding, relationship with Abdullah. In their past meetings, says Jim Smith, Obama’s ambassador to Riyadh until last October, “Obama was deferential and respectful of the King’s age, and the King was respectful of the President’s position and his brainpower.”

Read the full story here, on TIME.com: The King and O

TIME Saudi Arabia

Saudi Arabian Blogger Faces Second Round of Public Flogging

Raif Badawi Saudi Blogger Protest Vigil
Clement Sabourin—AFP/Getty Images Ensaf Haidar (C), the wife of the Saudi Blogger Raif Badawi, holds a vigil urging Saudi Arabia to free her husband in Montreal on Jan. 13, 2015.

He has been sentenced to 1,000 lashes, to be carried out over the next 19 weeks.

Saudi activist Raif Badawi is set to be flogged 50 times again on Friday, after being sentenced in May 2014 to 10 years in prison, 1,000 lashes and a fine of more than $260,000 for setting up the Saudi Arabian Free Liberals Forum. The blog, which championed free speech, was shut down following his arrest in 2012

Badawi’s punishment began last week when he was lashed 50 times outside al-Jafali mosque in his home city of Jeddah after last week’s Friday prayers. The floggings attracted international attention because they followed heated debate on the topic of freedom of speech, after the Charlie Hebdo killings in Paris.

Canada, the U.S., Germany, Norway and other Western governments have issued statements calling for Badawi’s punishment to be dropped, although the U.K. has so far refused to publicly condemn the authorities in Riyadh.

Unless a prison doctor decides Badawi’s health is too poor to continue, he will continue to be flogged every Friday for the next 19 weeks.

Badawi’s wife told Amnesty International that she fears her husband may not be able to physically endure a further round of lashes. “International pressure is crucial,” she said. “I believe if we keep up the support it will eventually pay off. We must keep fighting.”

TIME energy

Could ISIS Attack Saudi Arabia’s Oil?

oil-industry-well-pumping
Getty Images

After all, a failed 2006 Al Qaeda attack on Saudi Arabia’s Abqaiq oil processing facility spiked oil prices by 3.4 percent

What will it take for oil prices to rise?

Oil companies have little incentive to turn off the taps, given that low oil prices are providing sharply lower revenues for them. It makes more sense for individual companies (and countries) to continue to produce flat out from existing production and hope for their competitors to go out of business.

With that mentality, oil prices could stay low for an extended period of time.

However, the one thing that could abruptly force oil prices up could be an unexpected geopolitical flashpoint. Violence in Libya since December has knocked a significant portion of their oil output offline. But surprisingly, oil markets have hardly noticed.

Perhaps it would take a much larger threat to global oil supplies to pull oil prices up from their doldrums.

What if, say, Saudi Arabia were to experience a wave of violence, disrupting the notion that one of the world’s largest oil producers is safe from all the turmoil seen in neighboring countries? This is an unlikely scenario, as the Saudi Kingdom is armed to the teeth and keeps an iron grip on the nation’s security.

Nevertheless, Saudi Arabia is at the top of ISIS’ hit list. The group’s leader has called Saudi Arabia “head of the snake and stronghold of disease.” Much of that has to do with Saudi Arabia’s cooperation in combating ISIS in Iraq and Syria. The feeling is mutual — the highest religious authority in Saudi Arabia labeled ISIS as the “greatest enemy of Islam.”

While there has been little news about the presence of ISIS in Saudi Arabia, the militant group has conducted several attacks there over the past year. The group released a video on December 1 depicting the murder of a Danish national, which apparently occurred inside Saudi Arabia.

Moreover, Sputnik News reported that ISIS launched an attack on Saudi border guards on Jan. 5. Three guards were killed after a militant detonated a suicide belt. The ISIS attackers were Saudi nationals.

Saudi Arabia’s involvement with the military campaign in Iraq and Syria, which involves military cooperation with the United States, fuels anger among its own population. This presents ISIS with a recruitment opportunity within Saudi borders.

Several thousand Saudi nationals have joined ISIS in Iraq and Syria, and the Saudi government has even resorted to implementing a “counseling and care” program for returning fighters to reintegrate them into society. The Saudi government has stated that 12 percent of returning fighters have “relapsed,” and returned to “terror-related activities.”

What if ISIS attacked energy installations? The Jan. 5 attack at the border was a worrying, albeit, small warning of what is possible. As the largest exporter of crude oil in the world, an attack on oil-related facilities — even if unsuccessful — could rattle the markets. After all, in the immediate aftermath of a failed 2006 Al Qaeda attack on Saudi Arabia’s Abqaiq oil processing facility oil prices spiked 3.4 percent.

Abqaiq is the world’s largest processing facility, and if the 2006 attack had succeeded, it could have sent oil prices to unfathomable heights.

The government has stepped up security over the last decade at critical energy structures, and built in redundancy in order to ensure an outage won’t disrupt exports. But the 2006 attack was not an anomaly. In 2010, Saudi Arabia arrested 113 suspected Al Qaeda suspects for planning attacks on oil installations.

The Saudi government has weakened Al Qaeda but ISIS presents a new threat. In Nov. 2014, the leader of ISIS called for attacks on the Saudi Kingdom.

For now, there is no evidence that any Saudi oil production is at risk or that ISIS is even planning substantial attacks on Saudi oil fields or infrastructure. The attacks at the borders have been narrow in scope and mostly unsuccessful. Even if the group is considering something more ambitious, it is unlikely that Saudi Arabia would allow ISIS to succeed.

Moreover, low oil prices are hurting the finances of ISIS — the group gets much of its cash from smuggling and selling oil. Reliable data is obviously hard to come by, but it is safe to assume ISIS is likely fetching less money for its contraband than in months past, lowering its ability to stage large-scale attacks in Saudi Arabia.

Finally, it is important to note that even if an attack somewhere around the world knocked some oil production offline, it would not affect oil prices quite as dramatically as it would have a few years ago before the shale revolution. There is a considerable amount of slack production that would cushion any price rise.

Still, should the appearance of stability in Saudi Arabia begin to crack due to an ISIS attack, that would inject a whole lot of uncertainty into the market.

This post originally appeared on OilPrice.com.

Read more from Oilprice.com:

TIME Saudi Arabia

Saudi Cleric Declares All Snowmen Abominable

UK Hit By Heavy Snow Fall
Dan Kitwood—Getty Images DORKING, UNITED KINGDOM - JANUARY 19: A family of snowmen sit on Box Hill on January 19, 2013 in Dorking, United Kingdom. Heavy snow around the UK caused hundreds of flight cancelations at Heathrow, with more travel disruptions expected during a snowy weekend. Approximately 3,000 schools were closed in England, Wales and Scotland. (Photo by Dan Kitwood/Getty Images)

Asks followers to resist the urge to build them

A prominent Saudi cleric triggered a minor backlash on social media when he advised his followers not to build a snowman, “even by way of play and fun,” claiming the practice was forbidden under Islamic law.

Sheikh Mohammed Saleh al-Munajjid made the pronouncement shortly after a winter storm dusted the northern reaches of the Arabian peninsula with snow, Reuters reports.

Munajjid, fielding questions on a religious website, replied that any representation of a man, including a snowman, violated the kingdom’s strict ban against figurative depictions of the human form.

“God has given people space to make whatever they want which does not have a soul, including trees, ships, fruits, buildings and so on,” he said.

The interpretation proved contentious on social media, where some commenters posted derisory images of snowmen, while other’s commended the cleric for his “sharp vision” against Satanic temptations.

Read more at Reuters.

TIME Markets

Saudi Prince Says We’ll ‘Never’ See $100 Oil Barrels Again

Al Waleed Bin Talal Visits Zaatari Refugee Camp In Jordan
Jordan Pix—Getty Images Saudi Prince Alwaleed bin Talal visits Zaatari camp for Syrian refugees northeastern Jordan

"You better believe it is gonna go down more," Alwaleed bin Talal said

Saudi royal prince Alwaleed bin Talal says in a new interview that the days of $100-a-barrel oil are a thing of the past, as oil prices continue to drop around the globe.

Asked by USA Today if prices, recently below $50 a barrel, would continue to plunge, Talal answered:

If supply stays where it is, and demand remains weak, you better believe it is gonna go down more. But if some supply is taken off the market, and there’s some growth in demand, prices may go up. But I’m sure we’re never going to see $100 anymore. I said a year ago, the price of oil above $100 is artificial. It’s not correct.

He also categorized theories that the U.S. and Saudis are colluding to keep prices low to hurt Russian President Vladimir Putin as “baloney and rubbish.”

Read more at USA Today

Read next: France Mobilizes 10,000 Troops to Protect Sensitive Sites

Listen to the most important stories of the day.

TIME energy

Saudi Arabia Facing Largest Deficit in Its History

map-flag-saudi-arabia
Getty Images

Oil prices have been dropping since June because of a market glut

The nearly 50 percent plunge in the price of oil during the past six months is expected to leave oil-rich Saudi Arabia with its first budget deficit since 2011 and the largest in its history.

The budget, announced on Dec. 25, will include spending during fiscal 2015 of $229.3 billion, higher than in 2014, despite revenues estimated at only $190.7 billion, lower than in the current fiscal year. That would leave a deficit of $38.6 billion.

Oil prices have been dropping since June because of a market glut, caused in part because of prodigious oil extraction in the United States from shale formations.

As a result of this glut, OPEC was urged to cut production levels at its Nov. 27 meeting in Vienna in an effort to shore up prices, but wealthy members of the cartel, led by Saudi Arabia, decided to keep production at its nearly two-year-old level of 30 million barrels a day.

Saudi Oil Minister Ali al-Naimi has since explained that the OPEC strategy was to reclaim market share. Fracking has made the United States, once the cartel’s largest customer, nearly self-sufficient in oil. But fracking is expensive, and many believe it can’t be profitable if the price of oil falls much below its current level of around $60 per barrel.

Oil is the principal, if not the only, resource in Saudi Arabia, so it’s clear that the price of oil has a strong influence on how the country’s annual budget is drawn up. Different analyses, however, provide different answers to how Riyadh has forecast the commodity’s value. Four of these reports say the Saudi budget is predicated on oil averaging $55 to $63 per barrel in 2015.

One, from the Saudi investment bank Jadwa Investment, said the budget shows that the kingdom expects its oil exports to average $56 per barrel in 2015. Monica Malik, the chief economist at Abu Dhabi Commercial Bank, agrees, putting Saudi oil expectations at $55 per barrel.

The National Commercial Bank, the largest financial institution in Saudi Arabia, said the Finance Ministry expects a price of $61 per barrel. And Emad Mostaque, an oil strategist at Ecstrat, which consults for emerging markets, said the kingdom expected a price of $63 per barrel.

One particularly knowledgeable analyst is John Sfakianakis, the former chief economic adviser to the Saudi Finance Ministry. He told the London-based Arabic-language newspaper Asharq Al-Awsat that the budget is predicated on oil prices that are appreciably higher, averaging about $75 per barrel in 2015 while keeping production steady at 7 million barrels per day.

“What happened is a surprise to some extent, for amid this huge decline in the price of oil, the majority of people believed that the Saudi budget would base its projected revenues on $60 per barrel,” Sfakianakis said.

“When Saudi Arabia bases its projected oil revenues for next year on $75 per barrel, it is sending a strong message to the market that it expects oil prices to rebound next year,” Sfakianakis said.

This post originally appeared on OilPrice.com.

Read more from Oilprice.com:

TIME World

These Are the Top 10 Geopolitical Risks of 2015

Protesters hold a banner as they march during a demonstration against the visit of Germany's Chancellor Angela Merkel on April 11, 2014 in Athens.
Milos Bicanski—Getty Images Protesters hold a banner as they march during a demonstration against the visit of Germany's Chancellor Angela Merkel on April 11, 2014 in Athens.

TIME foreign affairs columnist Ian Bremmer provides a guide to the global storylines of the year, beginning with an unstable Europe

International stories rise and fall so quickly in today’s media. On Monday, it’s civil conflict in Ukraine. On Tuesday, it’s the rise of the Islamic State of Iraq and Greater Syria (ISIS). By Wednesday, the headlines are on to something else. Amid the global whiplash, it’s easy to lose sight of the larger picture. So as the new year begins, it’s useful to take a broader look at where these stories are headed—and to track the next wave of market-moving surprises in international politics.

Every January Eurasia Group, the political risk consultancy I founded and oversee today, publishes Top Risks, a roundup of the geopolitical trends we consider most likely to change our world in the coming year. This ranking reflects our forecast of which global storylines are most likely to play out over the next 12 months, which will have biggest impact on the markets and politics—and where we can expect surprises.

In 2015, political conflict among the world’s great powers is in play more than at any time since the end of the Cold War. U.S. relations with Russia are now fully broken. China’s powerful President Xi Jinping is creating a new economy, and the effects will be felt across East Asia and the rest of the world. Geopolitical uncertainty has Turkey, the Gulf Arab states, Brazil and India hedging their bets.

But the year’s top risk is found in once placid Europe, where an increasingly fractured political environment is generating new sources of conflict.

1. The politics of Europe

European economics aren’t as bad as they were at the height of the eurozone crisis in 2012, but the politics of the continent are now much worse. Within key countries like Britain and Germany, anti-EU political parties continue to gain popularity, undermining the ability of governments to deliver on painful but needed reforms. Friction is growing among European states, as peripheral governments come to increasingly resent the influence of a strong Germany unchecked by weak France or absent Britain. Finally, a resentful Russia and an aggressive ISIS will add to Europe’s security worries.

2. Russia

Sanctions and lower oil prices have weakened Russia enough to infuriate President Vladimir Putin, but not enough to restrain his actions. Moscow will continue to put pressure on Ukraine, and as a result, U.S. and European sanctions will tighten. As Russia’s economy sags, Putin’s approval ratings will depend increasingly on his willingness to confront the West. Western companies and investors are likely targets—on the ground and in cyberspace.

3. The effects of China slowdown

China’s economic growth will slow in 2015, but it’s all part of Xi’s plan. His historically ambitious economic reform efforts depend on transitioning his country to a consumer-driven economic model that will demand levels of growth that are lower, but more sustainable. The continuing slowdown should have little impact inside China. But countries like Brazil, Australia, Indonesia and Thailand, whose economies have come to depend on booming trade with a commodity-hungry China, will feel the pain.

4. The weaponization of finance

For the moment, the American public has had enough of wars and occupations, but the Obama administration still wants to exert significant influence around the globe. That’s why Washington is weaponizing finance on a new scale. The U.S. is using carrots (access to capital markets) and sticks (varied types of sanctions) as tools of coercive diplomacy. The advantages are considerable, but there is a risk that this strategy will damage U.S. companies caught in the crossfire between Washington and targeted states. Transatlantic relations could suffer for the same reason.

5. ISIS, beyond Iraq and Syria

ISIS faces military setbacks in Iraq and Syria, but its ideological reach will spread throughout the Middle East and North Africa in 2015. It will grow organically by setting up new units in Yemen, Jordan, and Saudi Arabia, and it will inspire other jihadist organizations to join its ranks—Ansar Bayt al Maqdas in Egypt and Islamists in Libya have already pledged allegiance to ISIS. As the militant group’s influence grows, the risk to Sunni states like Saudi Arabia, the United Arab Emirates and Egypt will rise.

6. Weak incumbents

Feeble political leaders, many of whom barely won reelection last year, will become a major theme in 2015. Brazil’s Dilma Rousseff, Colombia’s Juan Manuel Santos, South Africa’s Jacob Zuma, Nigeria’s Goodluck Jonathan and Turkey’s Recep Tayyip Erdogan will each face determined opposition and formidable obstacles as they try to enact their political agendas.

7. The rise of strategic sectors

Global businesses in 2015 will increasingly depend on risk-averse governments that are more focused on political stability than on economic growth, supporting companies that operate in harmony with their political goals and punishing those that don’t. We’ll see this trend in emerging markets, where the state already plays a more significant role in the economy, as well as in rogue states searching for weapons to fight more powerful governments. But we’ll also see it in the U.S., where national security priorities have inflated the military industrial complex, which now includes technology, telecommunications and financial companies.

8. Saudi Arabia vs Iran

The rivalry between Shiite Iran and Sunni Saudi Arabia is the engine of conflict in the Middle East. Given the growing reluctance of Washington and other outside powers to intervene in the region, increasingly complex domestic politics within these two countries and rising anxiety about the ongoing negotiations over Iran’s nuclear program, we can expect Tehran and Riyadh to use proxies to fuel trouble in more Middle Eastern countries than ever in 2015.

9. Taiwan/China

Relations between China and Taiwan will deteriorate sharply in 2015 following the opposition Democratic Progressive Party’s landslide victory over the ruling Nationalist Party in local elections this past November. If China decides that its strategy of economic engagement with Taiwan has failed to advance its ultimate goal of reunification, Beijing might well backtrack on existing trade and investment deals and significantly harden its rhetoric. The move would surely provoke public hostility in Taiwan and inject even more anti-mainland sentiment into the island’s politics. Any U.S. comment on relations between China and Taiwan would quickly increase resentment between Beijing and Washington.

10. Turkey

Lower oil prices have helped, but President Erdogan has used election victories in 2014 to try to sideline his political enemies—of which there are many—while remaking the country’s political system to tighten his hold on power. But he’s unlikely to win the authority he wants this year, creating more disputes with his prime minister, weakening policy coherence and worsening political unpredictability. Given the instability near Turkey’s borders, where the war against ISIS rages, that’s bad news. Refugees from Syria and Iraq are bringing more radicalism into the country and adding to economic hardship.

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