Sadaam gains the Saudi oil fields. Where does he draws a defensive line? The more he stretces himself out, the easier it is going to be for the coalition to defeat Iraq.
Short term, yeah financial markets an oil prices go to hell.
Say Sadaam immediately captures Riyadh and the Persion gulf states in September.
Insead of making the other Arab states cower, they are more determined to eradicate Iraq. Both Jordan and Turkey allow US build up. US build up in Yemen, Oman, Wetern Saudi and Jordan, and Turkey
US air war begins on March 1st without any ultimatum to withdraw. Air war goes same as OTL. US targets Iraq, and military targets in Kuwait and Saudi. Immediate success as stealths, smrt bombs, and US technology kick but. Sadam launches Scuds at Israel, Jordan, and Turkey.
Before grund war, coalition resolves that Sadam must be removed. Ground war begins on April 1. Coalition forces are able to encircle and destroy Iraqi army units. Ruse of amphibious landings works even better in this scenerio to pin Iraqi units to the coast. Iraq destroys much of the oil pumping and refinery capacity of Saudi, Kuwait, and the Gulf States. Other OPEC and non-OPEC members increase volume to keep world oil supply as stable as possible. US dips into reserves.
Iraq iscomplely overtaken within three months.
Occupation of Iraq is divided between the coalition with major participation of Arab countries and Turkey in the north. USA controls both Basra and Baghdad.
Next focus is on getting former oil fields up an running. A gobal engineering effort is made. Oil fields are pumping again within a year. Refinery's take more time.
Long tem effects are:
1.) No long term US presence in Saudi. US presence is in Yemen, Oman, and Iraq. So US barricks at Bagram are not bombed.
2.) Terrorists find other reasons to blame the US such as the US actually encouraged Iraq to invade Kuwait and Saudi so that Arabs would feal indebted to US after liberation. Does 9/11 ocur? Does USS Cole still occur? Does African embassy bombings occur? There is some insurgency activity in Iraq against US posts in Baghdad butno where near the actvity of 2004-2007
3.) Obviously, no Operation Iraqi freedom in 2003
4.) Bush Sr. still loses next election due to US economy tanking
5.) Bush Jr. still wins in 2000. Takes heat for Katrina responce and economic downturn in 2008.