The end of diplomatic relations between the Persian Gulf’s two major powers following the execution of prominent Shiite cleric Nimr Baqir al-Nimr and forty-six others on terrorist charges lead to a fall in oil prices on Monday. Analysts had expected prices to increase as OPEC became embroiled in a sharp division between two of its biggest producers. It is a testament to the crisis facing oil producers that a cataclysmic geopolitical event such as this has not caused an increase in oil prices.

The industry is already facing severe pressure following a worldwide acceptance of a need to cut greenhouse gas emissions and implement a systematic fossil fuel divestment in wake of the Paris Agreement. Any further destablisation to the market could initiate a worldwide pricing crisis that could cause mass unemployment across regional and national economies that are entirely dependent on oil and gas production. The volatile nature of hydrocarbon markets has always made long-term predicting a difficult task but this current political crisis could certainly be identified as a red herring.

Middle Eastern security and world oil prices have always been intertwined. The attack on Iran’s embassy in Yemen this afternoon will deepen the crisis and move the two nations towards a proxy war. Western powers had hoped the two countries could lead a Middle Eastern bloc to eradicate the threat of ISIS by cutting off their access to the oil fields of Syria and Northern Iraq. ISIS could be the main benefactor of this political crisis in the short-term as diplomatic efforts turn to preventing an armed conflict that could spread throughout the entire region.

The United States will be monitoring the situation very closely as they hope the end of the crude export ban will lead to an increase in global prices. Any political tensions in the Middle East could also give them leverage with OPEC as they await an end to the supply glut that is keeping prices so low.

Tensions between Iran and Saudi Arabia will sharpen divisions between Sunni and Shiite Muslims across the Middle East, increasing fears of an armed conflict. The United States and the West will focus their diplomatic efforts to ease tensions and prevent a regional crisis that will ease pressure on ISIS and reduce multilateral efforts to end the war in Syria.

As prices continues to fall, these last few days could be seen as a monumental event in the decline of oil.