• 7 hours Iraq Begins To Rebuild Largest Refinery
  • 11 hours Canadian Producers Struggle To Find Transport Oil Cargo
  • 13 hours Venezuela’s PDVSA Makes $539M Interest Payments On Bonds
  • 15 hours China's CNPC Considers Taking Over South Pars Gas Field
  • 16 hours BP To Invest $200 Million In Solar
  • 17 hours Tesla Opens New Showroom In NYC
  • 18 hours Petrobras CEO Hints At New Partner In Oil-Rich Campos Basin
  • 20 hours Venezuela Sells Oil Refinery Stake To Cuba
  • 1 day Tesla Is “Headed For A Brick Wall”
  • 1 day Norwegian Pension Fund Set to Divest From Oil Sands and Coal Ventures
  • 1 day IEA: “2018 Might Not Be Quite So Happy For OPEC Producers”
  • 2 days Goldman Bullish On Oil Markets
  • 2 days OPEC Member Nigeria To Issue Africa’s First Sovereign Green Bond
  • 2 days Nigeria To Spend $1B Of Oil Money Fighting Boko Haram
  • 2 days Syria Aims To Begin Offshore Gas Exploration In 2019
  • 2 days Australian Watchdog Blocks BP Fuel Station Acquisition
  • 2 days Colombia Boosts Oil & Gas Investment
  • 2 days Environmentalists Rev Up Anti-Keystone XL Angst Amongst Landowners
  • 2 days Venezuelan Default Swap Bonds At 19.25 Cents On The Dollar
  • 3 days Aramco On The Hunt For IPO Global Coordinators
  • 3 days ADNOC Distribution Jumps 16% At Market Debut In UAE
  • 3 days India Feels the Pinch As Oil Prices Rise
  • 3 days Aramco Announces $40 Billion Investment Program
  • 3 days Top Insurer Axa To Exit Oil Sands
  • 4 days API Reports Huge Crude Draw
  • 4 days Venezuela “Can’t Even Write A Check For $21.5M Dollars.”
  • 4 days EIA Lowers 2018 Oil Demand Growth Estimates By 40,000 Bpd
  • 4 days Trump Set To Open Atlantic Coast To Oil, Gas Drilling
  • 4 days Norway’s Oil And Gas Investment To Drop For Fourth Consecutive Year
  • 4 days Saudis Plan To Hike Gasoline Prices By 80% In January
  • 4 days Exxon To Start Reporting On Climate Change Effect
  • 4 days US Geological Survey To Reevaluate Bakken Oil Reserves
  • 4 days Brazil Cuts Local Content Requirements to Attract Oil Investors
  • 5 days Forties Pipeline Could Remain Shuttered For Weeks
  • 5 days Desjardins Ends Energy Loan Moratorium
  • 5 days ADNOC Distribution IPO Valuation Could Be Lesson For Aramco
  • 5 days Russia May Turn To Cryptocurrencies For Oil Trade
  • 5 days Iraq-Iran Oil Swap Deal To Run For 1 Year
  • 7 days Venezuelan Crude Exports To U.S. Fall To 15-year Lows
  • 7 days Mexico Blames Brazil For Failing Auction

Breaking News:

Iraq Begins To Rebuild Largest Refinery

Alt Text

Exxon To Disclose The Real Risk Of Climate Change

ExxonMobil has finally given in…

Alt Text

The Coal Miners That Refuse To Resurface

Hundreds of Kazak coal miners…

Alt Text

Regulated Utilities Could See Big Changes

As regulated utilities continue to…

This Week in Energy: Oil Price Predictions and a Potential U.S. Strike on Syria

This Week in Energy: Oil Price Predictions and a Potential U.S. Strike on Syria

Our take on oil price predictions and the anxiety over a potential US strike on Syria …

The specter of a US strike on Syria continues to haunt us, as talking heads debate whether the Obama administration is attempting to delay by asking for Congress’ permission, or whether it’s just hoping to have someone with whom to share the blame for an eventual strike.

As it stands, lawmakers aren’t giving the idea much support. The public opposition is too high, and enough lawmakers seem to feel that supporting a strike on Syria would be tantamount to ending their careers.

Throughout all of this, there is plenty of debate on what a strike on Syria would mean for oil prices, and for the economy in general.

It depends who you ask—a Syrian strike could either lead to a major spike in oil prices, or the reverse.

According to Forbes, “the flight of the tomahawks threatens to tank equities further, but if history is any indicator, declines should be short-lived and more of a buying opportunity than anything else. The one big thing to watch though is oil prices, which could spike and derail the tepid global economic recovery.”

What would cause a spike would not be what happens in Syria, directly; rather the potential snowball effect. If Iraq—which is already the second frontline in this conflict—sees its oil infrastructure attacked, for instance, this could cause a major spike in oil prices.

Something like this, though, is extremely difficult to predict. Iraq’s involvement in the Syrian conflict is in the form of a connection between Sunni jihadists who are operating in both conflict theaters. This cross-border activity has now sparked a similar cross-border exchange among Shi’ites in Iraq who are helping to boost Hezbollah forces fighting alongside the Assad regime in Syria. This is leading to a major increase in sectarian violence among Sunnis and Shi’ites in Iraq. Each month the death toll is higher as the violence increases in tandem with what is going on in Syria—and the bodies coming back home to Iraq for burial. An attack on Iraq’s oil infrastructure would have to come from the Sunni support base—not the Shi’ites, who control the country and who have a vested interest in Iraqi oil. In turn, a Sunni attack on Iraq’s oil infrastructure would be one way of retaliation for an Assad victory in Syria. It would be a strike against the Iraqi Shi’ite leadership and their nominal Iranian supporters. But it would be in no-one’s clear interest at this time, not Tehran’s and not Washington’s.  

Another factor that would contribute to a spike in oil prices would be Iran’s response to a US strike on Syria. Iran holds the Strait of Hormuz card. This key oil transit point could be closed off by Iran, theoretically, which would be economically devastating to the US. But remember that there is a new president in Iran, and if he can maintain control over the situation, this will not happen. Iran’s new president and his new oil minister are desperately seeking to get back into the global oil and gas game, and closing the strait would kill these ambitions.  

We are inclined to disagree with the talking heads expressing themselves through Forbes. It is more the run-up to a potential military intervention that sends oil prices soaring, not the intervention itself, which has historically had the opposite effect. Why? Because almost every military intervention is pinned on opening up more oil opportunities, and the vultures descend. For Syria, the prospects are some lucrative pipeline routes and the potential offshore, where Israel has already made some big finds and Lebanon will eventually start exploring once it is unburdened by the violence and political chaos spilling over from Syria. The grand finale of the Syrian conflict might even see the Syrian Kurdish north become the next Iraqi Kurdistan in terms of oil and gas exploration.

Remember what happened in Libya? The pre-intervention nerves were on edge, leading to rising oil prices, but once the tomahawks were in the air and all that Libyan oil was becoming a reality in the minds of the eager, oil prices dropped.

We will continue to follow the events in Syria over the coming weeks, both in our regular publications and more in-depth in our weekly premium newsletter, Oil & Energy Insider.

Premium this week is one of our best yet and is a must read for energy investors who are looking to find out the next 5 trends the oil & gas industry are investing in and where early investors will make huge gains. Energy investors only need to catch one trend to make fabulous returns – find out the 5 trends we believe are going to be major profit centers for the oil sector for the coming years and the companies we believe will benefit most in this week’s Inside Investor.

We also have a superb report from our new writer, Dave Forest that looks at developments taking place in offshore horizontal drilling and two companies that could see their stock prices shoot up. (This is not a report to miss.)

Read these reports and get full access to our archives with a 30 day Free trial to Oilprice Premium. Click here to start your free trial.

That’s it from us this week.

James Stafford
Editor, Oilprice.com




Back to homepage


Leave a comment

Leave a comment




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