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The various conflicts and standoffs littered across the Middle East are affecting global oil markets to varying degrees. Lately the deteriorating situation in the Gaza strip between Israel and Palestine has been grabbed the attentions of traders and market regulators, yet Matthew Hulbert of Forbes suggests that they are actually focussing on the wrong crisis.
He explains that Syria holds the key to the Middle East’s future, it offers a far greater threat to oil supplies in the area, and that it is here where we should be concentrating.
Despite victories in many areas by the Free Syrian Army, Assad remains in firm control of Damascus, as well as the Syrian military. Neither side looks likely to win any time soon, yet neither are they willing to start negotiations to end the 19 month war.
Saudi Arabia, Qatar, and Libya are backing the rebels, supplying them with arms and finances to keep up their attack on Assad’s regime; whilst Iran exist as the only Middle Eastern nation to show their support for Assad, although Russia are also lending a hand where they can (hoping that they can benefit from the instability in the region).
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Now the League of Arab States will never invade Syria, but neither will Iran make a move whilst it is already under severe pressure from the EU and US sanctions. Israel are unlikely to risk a war on another front, and the US and Europe are still recovering from the recent campaigns in Iraq, Afghanistan, and Libya.
So for now it seems as though the conflict will continue to run its course, and who knows where it will end up. Qatar and Saudi Arabia are more than happy to let it turn into a battle of Sunni v Shia, which would then pit the majority of Gulf nations against Iran.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com