The current crisis in middle East have the potential to disturb the global crude oil supply and cause a price rise. But it is not foreseeable that the catastrophic price increases nor the Long lines in the gas stations who saw each other after Arab oil embargo of 1973they say experts.
The war between Israel and Hamas “definitely not good news” for the oil marketsalready affected by the cuts in production of Saudi Arabia and Russiaand for the possibility of higher demand in Chinahe indicated Fatih Birolexecutive director of the International Energy Agencybased in Paris.
The markets they will continue unstableand the conflict it could provoke price increases“which is definitely bad news for inflation,” he commented Birol to The Associated Press. The Developing countries that import oil and other fuels would be the most affected by the increase in prices, he added.
He Brent crude oil of international reference closed in 93 dollars the barrel on Friday, compared to the 85 dollars to whom the October 6one day before Hamas will attack Israel and kill hundreds of civilians.
The fluctuations since the attack Hamas They made prices even reach 96 dollars.
He oil price It depends on how much it is being used and how much it is available. The latter is under threat due to the war between Israel and Hamaseven though the Gaza Strip It is not an area of large oil production.
A worry is that the fighting could lead to complications with Iranwhere some of the largest oil reserves of the world. Its production of raw has been limited by the international sanctionsbut its oil still flows China and other countries.
“So that there is a sustained change (on prices), we would really need to see a interruption in supply“, said Andrew LipowPresident of Lipow Oil Associatesa consultancy located in Houston.
Any damage to the oil infrastructure Iranian as a result of a military attack by Israel could cause a price rise at a global level. Even without that, a shutdown of Strait of Hormuz —which is located south of Iran— could also shake the oil marketsince a large part of the world supplies they pass by there.
Until something like that happens, “the oil market will be like everyone else, monitoring the events in middle East“, he pointed Lipow.
A reason why it is unlikely that there will be lines at gas stations similar to those of the 1970s is that the oil production in USA It is at its highest level in history. The Energy Information Administrationan arm of Department of Energyreported that the American oil production In the first week of October it reached 13.2 million barrels per day100,000 barrels more than the previous record set in 2020. The weekly domestic oil production has doubled from the first week of October 2012 to the present.
“The energy crisis of 1973 taught us many things, but from my point of view, the most crucial is that american fortress In the energy sector it is a tremendous source of security, prosperity and freedom all over the world,” he said. Mike Sommerspresident and CEO of American Petroleum Institutethe main commercial group of the oil industry in USA.
In a speech delivered on Wednesday to commemorate the 50th anniversary of the 1973 oil embargo, Sommers said that the current American production contrasts sharply with “the weakened position of the United States during the Arab oil embargo”. He exhorted the politicians of the country to take into account what he said are the lessons from 1973.
“We cannot squander our strategic advantage and go back in leadership on energy issues,” he said. Sommerswho has repeatedly criticized the president’s policies Joe Bidenwhich include restrictions on new concessions to extract oil as part of the president’s attempts to slow the pace of the climate change.
“In a unstable worldwith war in Europewar in middle Eastand the energy demand higher than supplythe energy security is at risk,” he said. Sommers in its speech in it Hudson Institutea research center in Washington.
“American oil and gas are needed now more than ever,” he said. “Let us take seriously the lessons what we learned from 1973 and avoid sowing the seeds of the next energy crisis”.
For now, the current crisis has not been a repetition of that of 1973. The Arabian countries they are not attacking Israel in unison, and the nations of the OPEC+ have not taken measures to restrict supplies or boost prices prices beyond a few extra dollars.
There are several unpredictable points in the energy market. One of them is the iranian oil supply. Anxious to avoid an increase in gasoline prices and inflation, USA has tolerated some exports of Iranian crude to destinations such as Chinainstead of strictly applying sanctions against the nuclear program of Tehran.
Yeah Iranwho has warned Israel not to undertake one ground offensiveaggravates the conflict in Loop —including a possible attack of Hezbollah militants in Lebanon—, that could modify the position of Washington. “Yeah USA was then to apply oil sanctions against Iran more strictly again, the oil market “It would look noticeably tight,” they said. Commerzbank commodity analysts.
He crude oil market was shaken Wednesday after the Iranian foreign minister urged Muslim nations to launch a oil embargo against Israelbut the prices They soon diminished.
Meanwhile, American legislators of both parties have urged Biden to block Iranian oil sales, in an attempt to exhaust one of the Islamic republic’s sources of financing.
Another unpredictable point is how he would respond Saudi Arabia if Iranian oil is restricted. Oil analysts They say that while the Saudis might welcome recent increases in oil prices, they don’t want a massive price increase that would fuel inflation, cause increases in central bank interest rates, and a possible recession in countries that consume oil, which in the long run would limit or even paralyze the demand for crude oil.
A third unknown element is whether more oil will reach the market from Venezuela. USA agreed Wednesday to temporarily suspend some sanctions on the oil, gas and gold sectors in the South American country after the Venezuelan government and a faction of its opposition formally agreed to work together to achieve electoral reforms.
The Venezuelan production could increase in 2024. However, in the next six months it could increase by about 200,000 barrels per daywhich is relatively a very small amount, according to Sofia Guidi Di Santesenior oil market analyst at Rystad Energy.
The senator John Barrassothe leading Republican in the Senate Energy and Natural Resources Committeecriticized the action of USAcalling it a “trick” that pleases a brutal regime in Venezuela.
“The energy policies of Joe Biden put to USA in the end,” he said. Barrassopointing out the president’s decisions to suspend the controversial pipeline Keystone XL and sell off portions of the nation’s Strategic Petroleum Reserve, bringing it to its lowest level since the 1980s. Department of Energy It said Thursday that it will solicit bids to begin filling the reserve in December, with monthly requests expected through May 2024.
“It eased the sanctions against Iranwhich finances the terrorism throughout middle East. Now what Israel is being attacked, Biden “He is desperate for anything that will allow him to cover up the consequences of his reckless policies,” he commented. Barrasso. “USA “You should never beg socialist dictators or terrorists for oil.”
He Treasury Department says it has taken action against nearly 1,000 individuals and entities linked to the terrorism and to terrorist financing by the iranian regime and its allies, including Hamas, Hezbollah and other groups in the region.
“We will continue to act as required to counteract the destabilizing activity of Iran in the region and throughout the world,” said the Treasury Department it’s a statement.