The $100 Barrel of Oil

Oil at $100 would "only" be a 50% increase over today's prices, far less than the run-up caused by previous regional conflicts. So that raises the question: Could Iraq's civil war ignite a new one?

Civil War Contagion

Left unchecked, it well might. Civil wars tend to draw in the neighborhood. Concerned about border control, the security of trade routes, influxes of war refugees, the rise of transnational criminal networks and the welfare of ethnic kin, neighbors play patron to favored factions. And Iraq, lying squarely in the middle of the world's most volatile region and on the fault line of the centuries-old bloody divide between Sunnis and Shiites, represents a potential perfect storm of these concerns.

To the north lies Turkey, which has vowed to intercede if Iraq's Kurdish North tries to declare an independent Kurdistan.

To the east is Iran, which already systematically interferes in Iraqi politics and security matters in an effort to cultivate a friendly Shiite government in Baghdad.

To the south and southwest, Saudi Arabia and Jordan are deeply concerned about the emergence of an Iranian Shiite crescent of power stretching from Tehran to Beirut. Indeed, Saudi Arabia has warned that it will support Iraqi Sunnis in the event of an all-out civil war.

And to the west, Syria exploits Iraq's instability for profit and strategic advantage.

But while all are poised to join the Iraqi civil war, none actually wants to. Iraq's Sunni-Shiite divide is mirrored in adjoining states, and those populations could become radicalized by sectarian warfare and threaten to topple existing governments. Subsequent social instability fomented by refugee crises, combined with attacks on oil and transportation infrastructure, could roil economies.

However, Iraq's neighbors cannot contain a civil war alone -- they need the U.S. No major security agreement in modern Middle Eastern history has been brokered and enforced without active U.S. involvement. With over 150,000 troops in-country, effective command-and-control of ground security forces, air dominance and two carrier strike groups in the Persian Gulf, the U.S. brandishes credibility and means. For all of the ill-will its recent Middle Eastern misadventures have generated, only the U.S. can threaten and cajole the leaders of all relevant players to the table and orchestrate the array of incentives, deterrents and face-saving compromises needed to avert a region-wide descent into an Iraqi civil war.

But will it?