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It goes without saying that the potential for a general war in the Middle East between the Iranian and Saudi spheres of influence, as described by Bloomberg's Donna Abu-Nasr, is horrific.

Saudi Arabia’s move to isolate Iran raises the specter of deepening conflicts in the volatile Middle East after the biggest meltdown in relations between the two regional powers in almost three decades.

The Saudi government and staunch ally Bahrain severed diplomatic ties, giving Iranian ambassadors 48 hours to leave after protesters set the Saudi embassy in Tehran on fire over the weekend following the execution of Saudi cleric Nimr al-Nimr, a critic of the kingdom’s treatment of its Shiite minority. The United Arab Emirates reduced its representation to the level of charge d’affaires.

The clash exposes again the fault lines in the world’s tinderbox and risks worsening conflicts in Yemen and Syria, where Sunni-dominated Saudi Arabia and Shiite Iran are fighting proxy wars. The widening rift follows Saudi criticism of the U.S.-led deal last year over Iran’s nuclear program. It also comes as the collapse in the oil price strains domestic finances in a region that accounts for more than half of global reserves.

"The temperature right now is rising and I’m not sure we are seeing the end of escalation of tensions here," Robert Jordan, a former U.S. ambassador to Saudi, said in an interview with Bloomberg Television.
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