The $64,000 question on everyone's mind today is: What would be the repercussions if ISIS were successful in toppling the government of Iraq and most importantly what would be the impact on the US financial markets and oil prices at large? Given my experience in the region, I would venture to say that if this scenario were to happen, locally Iraq will be renamed and most of the minorities will be cleansed or uprooted. The rest of the Sunni population will be subjected to strict Sharia law, a Taliban style governing with Shuras will be adopted, then the focus will shift to topple Assad completely with the help of revenue generated through the Iraqi oil money.

On a wider scale, Iran will be tempted to invade Iraq thus turning this into a major international crisis as Russia and even China will be backing Iran since both countries have boiling Islamic militant problems especially Sunni in their background. This will be their "War on Terror" which Washington will have practically no moral grounds to oppose. Washington on the other hand will be put to test in terms of its relationship with the House of Al Saud as Saudi Arabia and other Sunni Arab states will scramble to support ISIS directly or indirectly as they don't want a Shiite Government in Iraq in power. ISIS might also go for Turkey and indirectly support militant Islam in other Central Asian countries and Afghanistan. Eventually, the West will be targeted again, but for now they would want a Sunni backed power house rather than seeing the Middle East falling into the hands of the Iranians.

I presume we in the US would have a terrorist group as our ally against Iran. Oil fields in the region would be gravely threatened, leading to uncontrollable spikes in oil prices. That, in turn, could really put pressure to move to solar, domestic natural gas, wind and coal for our energy needs. Hello electric cars! Or maybe that would finally heal the rift between the US and Iran, much to the chagrin of Israel and Saudi Arabia...which could lead to a second wave of oil shocks. Turkey on the other hand may get alarmed enough to carve out enclaves in Syria for refugees and try to counter ISIS. That could cause other headaches for NATO...

Bottom Line: Even with decreasing oil imports, the US is inextricably linked to world markets. That means that if the situation in Iraq continues to deteriorate, the US economy may not be immune. Our main vulnerability is not so much the direct impact on oil, but the impact on the rest of the world's economy, if there's a big oil supply disruption. As long as the world oil market is pretty highly integrated, the US is vulnerable to an oil supply disruption in the Middle East or the Persian Gulf, regardless of the amount of oil it imports from the region. Why? Because even though the United States has reduced its use of Middle Eastern oil, many of America's key trading partners have not. It is a fact that the oil production in Iraq has risen for seven years in a row and that oil is going somewhere. Much of it going to Asian economic powerhouses whose economies are deeply tied to our own.

Turkey, Jordan, Lebanon, and, of course, Israel, would be the first to feel the effect of a takfiri victory. But so would Saudi Arabia, Kuwait, Bahrain, Qatar, the UAE, Oman and Yemen. Sadly, if ISIS is successful in Iraq, there is little reason to believe they would stop. In fact, anyone who thinks they will stop with Iraq is just delusional. Welcome to a mess with no end in sight. Share your thoughts. Thank you,,, Follow me @ https://www.facebook.com/ziad.k.abdelnour https://twitter.com/blackhawkinc http://www.linkedin.com/groups?mostPopular=&gid=1227 http://www.pinterest.com/ziadabdelnour