• 2 days Shell Oil Trading Head Steps Down After 29 Years
  • 3 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 3 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 3 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 3 days Venezuela Officially In Default
  • 3 days Iran Prepares To Export LNG To Boost Trade Relations
  • 3 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 3 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 3 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 4 days Rosneft Announces Completion Of World’s Longest Well
  • 4 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 4 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 4 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 4 days Santos Admits It Rejected $7.2B Takeover Bid
  • 4 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 4 days Africa’s Richest Woman Fired From Sonangol
  • 5 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 5 days Russian Hackers Target British Energy Industry
  • 5 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 5 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 5 days Lower Oil Prices Benefit European Refiners
  • 5 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 6 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 6 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 6 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 6 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 6 days OPEC To Recruit New Members To Fight Market Imbalance
  • 6 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 6 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 6 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 7 days GE Considers Selling Baker Hughes Assets
  • 7 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 7 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 7 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 7 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 7 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 9 days The Oil Rig Drilling 10 Miles Under The Sea
  • 10 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 10 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 10 days Italy Looks To Phase Out Coal-Fired Electricity By 2025
Alt Text

Ghana Looks To Ramp Oil Production

A relative newcomer to the…

Alt Text

Why Saudi Arabia’s Crackdown Sent Oil Prices Soaring

Saudi Arabia’s most powerful man…

Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

More Info

Syria Barely a Blip on International Oil Market

Syria Barely a Blip on International Oil Market

The International Energy Agency said last week it was staying on the sidelines despite the recent spike in crude oil prices. Brent prices are up more than 10 percent since July, when the Egyptian military toppled the democratically-elected government. Prices increased more dramatically on speculation that Western military intervention in Syria was imminent. Meanwhile, Libya, one of the region's largest oil producers, is still struggling to meet global expectations. When Libya descended into civil war two years ago, the IEA called for a release of strategic petroleum reserves. The IEA said it was keeping its eye on the ball this time around but the immediate concern over Syria has little influence on actual oil supplies.

Brent prices are up more than 10 percent from July 1. Since then, the Egyptian military removed Mohamed Morsi from power, Libya declared force majeure because of strikes at oil terminals and Western powers mulled military intervention in response to Syria's alleged use of chemical weapons on a suburb of Damascus. For August, the price for the international benchmark Brent moved up nearly $8 to more than $115 per barrel in part because of regional unrest.

Related article: How to Trade the Ongoing Events in Syria

U.S. Secretary of State John Kerry struck a noticeably presidential tone when he laid out Washington's case last week for military intervention in Syria. With more than 1,400 Syrians killed in an alleged chemical weapons attack by government forces, Kerry said there was a moral case for action.

"It matters because if we choose to live in a world where a thug and a murderer like [Syrian President] Bashar al-Assad can gas thousands of his own people with impunity, even after the United States and our allies said no, and then the world does nothing about it, there will be no end to the test of our resolve and the dangers that will flow from those others who believe that they can do as they will," he said.

Military intervention in Syria may have broader implications across much of the region. Given the way in which the Arab Spring spilled out from Tunisia, intervention in Syria has the potential to spark a conflict that extends beyond its immediate borders. Analysts say sectarian conflict in neighboring Iraq has already left one of the main oil arteries to Turkey vulnerable to acts of sabotage. Iran, one of Syria's strongest allies, may decide to block traffic through the Strait of Hormuz, the conduit for 20 percent of the world's oil supply. Hezbollah, Syria's partner in neighboring Lebanon presumably has the ability to take some action that could complicate the broader energy markets. The consequences of Syrian war could potentially create a doomsday scenario for oil markets.

Related article: Financial Limits will Arrive Sooner if Oil Prices Remain High

That's unlikely, however. The Iraqi pipeline to Turkey has been a steady target of sabotage before any talk of military intervention in Syria. Iran hasn't made any serious attempt to close the Strait of Hormuz since the 1990s. If it did, not only would it handicap its own economy, but the United Arab Emirates opened a land route last year to bypass some of the maritime shipments through the region. Hezbollah, meanwhile, has concerned itself only with Israeli claims to Mediterranean natural gas. All of those factors may be secondary concerns, but its only Libya that poses a serious threat to international oil supplies.  Syria's actual contribution in terms of oil is, for all intents and purposes, non-existent.

When civil war erupted in Libya in 2011, the IEA called on its members to inject emergency reserve barrels into the market. This time around, however, there are few supply concerns, the Paris-based agency said. That's not to say oil prices won't react to a Syrian intervention by moving past the $120 mark but, just as with any U.S. military intervention, the consequences should be limited.

By. Daniel J. Graeber at Oilprice.com




Back to homepage


Leave a comment
  • Crazy Cooter on September 02 2013 said:
    Curious. As best I can tell (from the sidelines) Iran will absolutely back Syria if things escalate. Russia stands to lose their European nat gas market if Syria falls and ends up with a Western friendly government. Russia is absolutely backing Syria (and Iran).

    To me, that is the stupidity of the Obama administration; this is going to get out of hand very quickly. An interruption to Hormuz, a very narrow channel which could be blocked by a few sunk ships, is 20% of global oil shipping traffic, hardly something which will be replaced by a land route.

    **IF** a missile strike against Syria gets out of hand, the global economy will crash as oil prices head to the moon (or beyond).

    Regards,

    Cooter
  • Philip Branton on September 03 2013 said:
    If Alexander the Great read this article......what would he say ..?

    If General Patton read this article....what would he have told "Montgomery"..?

    If Martin Luther King had read this article, what would he have told the "Pope"..?

    If Napolean had read this article....how would he illustrate a map of Syria to "Mongolian Traders"..?

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News