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Intervention in Syria may affect oil prices

30th August 2013

Debate grows about what attacks on Syria will do to oil prices worldwide

Military forces in Iraq
The concern is less to do with Syria itself but from the paths BRIC countries use to get through to much more prominent oil exporters such as Iran.

With growing word from the US about a possible response to alleged actions by the Syrian government, attention has turned to the effect that this will have on the oil industry.

 

The concern is less to do with Syria itself, which produces moderate amounts of crude oil compared to others in the Middle East, but from the paths that several countries use to get through to much more prominent oil exporters in the region such as Iran, Iraq and Saudi Arabia.

 

Simon Wardell, senior energy analyst at IHS says that what happens next will determine the price rise: “While it may still need several steps to translate this into problems, that is where the additional price premium comes in. These are unlikely, but markets respond to the overall risk profile – and military intervention certainly increases the risk.”

 

India’s recent intentions to make an oil deal with Iran, a move made with the purpose of cutting its high oil import deficit, would be affected by attacks to Syria because of the price of oil rising.

 

China is the Middle East’s largest consumer of crude oil, with company China Petrochemical Corp recently agreeing a deal for a 33 per cent stake in US Company Apache Corp’s Egyptian oil and gas business for USD 3.1bn.

 

At the start of this week, oil prices were at a six month high of USD116.61 for Brent crude because of growing concerns of military interventions. Recent news are more optimistic, with prices dropping to under USD 107 after the British government voted against military actions against Syria.

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