I was very tempted to consider an oil short, I was thinking SCO long (2x short crude). My hesitation...
That's simple, Egypt. Back when Mubarak was in control I made my position clear that he would be tossed out, but not by the people, by the military and in the end that's exactly what happened. Every President of Egypt since Nasser has been chosen by the military, from the military and backed by the military, Mubarak made the mistake of thinking he could groom his son to take over, thereby effectively by-passing the military's control of the process. The Egyptian military came off brilliantly, they looked impartial, doing the will of the people, but they were only serving their own interests.
At the time I also made many notations of the Muslim Brotherhood and other extremist groups sneaking across the Sinai during this chaos and putting together an effective strategy, this was VERY much like the second Iraq war when US combat troops would roll in to a town and have a local government in tow and ready to take over, but to their surprise, town after town had already been organized by Shi'ite factions and everything was running smoothly.
The lesson though of Iraq and Afghanistan (in the later's case, more than a decade later), it is very difficult to put together effective leadership that can project power outside of the capital with out some kind of "distasteful" ruler with an iron fist or in Egypt's case, without the implicit backing of the military.
It's quite obvious the Muslim brotherhood does not have the military's backing and they have lost any backing they may have had with the people as 1 million plus flood the streets of Cairo and Tahir square.
A military face-off with what many would (I believe correctly) identify as an extremist group, could have repercussions throughout the area and even if there aren't, the market's perception is ALL that matters.
That's enough to keep me away from oil for now, you may feel differently or have a better grasp of the situation there.
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