The Saudi King, King Salman has approved hosting US forces in the country to boost security and stability, the state news agency SPA reported on Friday. The US Defense Department, according to CNBC, confirmed the move in a statement, saying that the US will deploy troops and resources to Saudi Arabia to provide support to counter threats that are starting in Tehran.
Washington and Tehran are facing off in the Gulf and this could impact Global oil markets. Note that on Friday, Iran seized a British oil tanker and soon after Washington said that it downed an Iranian drone. The Pentagon said in June, that the US would deploy 1,000 troops to the Middle East but did not say where, of course it has become clear where this first wave of troops will be going.
Our Views: The US, Saudi Arabia, UAE and other oil producing nations in the area are concerned about Iranian activity in the Strait of Hormuz that could impact the flow of oil to the Far East, namely China, Japan and South Korea. The US is now working with Japan, Germany, the UK and France to control and ensure the free flow of out in the Middle East to the world.