Policymakers are suggesting that interest…
Despite $70 oil, U.S. shale…
The U.S.-led coalition is deliberately bombing oil wells in Syria to punish Damascus and make it pay millions of dollars to restore work at those fields, Syria’s Deputy Foreign Minister Faisal Mekdad told Russian news outlet Sputnik on Wednesday.
“They made it necessary to spend tens of millions of dollars to resume work at these [oil] fields,” Mekdad was quoted as saying by the Russian outlet.
Russia and Iran support the government of Syrian President Bashar al-Assad in the complex Syrian conflict, which is now in its eighth year.
Heightened tensions in Syria last month highlighted the geopolitical risk premium in oil prices and started the oil price rally which has continued this month with the U.S. withdrawal from the Iran nuclear deal. The increased probability of open conflicts in the Middle East as local players and global powers vie for influence has stoked fears over losses of crude oil supply from the key oil export region in the world.
Syria is not a major oil producer, but its strategic position in the Middle East and the various proxy conflicts within its territory add additional geopolitical risk premium to oil prices when tension escalates.
Earlier this week, U.S. Secretary of State Mike Pompeo demanded that Iran withdraw all forces under Iranian command throughout the entirety of Syria, end support to Middle East terrorist groups, including Lebanese Hezbollah, Hamas, and the Palestinian Islamic Jihad, and end its military support for the Houthi militia and work towards a peaceful political settlement in Yemen.
“Whether Iranian forces or Hezbollah withdraw or stay in Syria is not up for discussion because it’s the (business) of the Syrian government,” Lebanon’s al-Mayadeen TV quoted Syria’s Mekdad as saying on Wednesday.
“The U.S. is no longer the indispensable nation in the Middle East — it’s Russia. Putin has more control in this powder keg than American experts like to admit,” Sean McFate, a senior fellow at the Atlantic Council, wrote in a commentary for CNBC this week.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.