Syrian upheaval drives oil price spike amid global tensions
The fall of Bashar al-Assad, who had been in power in Syria for nearly 25 years, impacted oil prices. The sudden change in the Middle East is a setback for Russia and Iran, which support the regime. Traders are factoring in the effects of the rebels taking power. Oil markets responded with a rise in prices.
The price of the widely-traded Brent crude rose at the opening of the exchanges on Monday to $72 per barrel, while West Texas Intermediate surpassed $67. The noticeable fluctuation in the markets is due to traders evaluating the effects of the coup in Syria.
Bloomberg reported on Monday that the collapse of Bashar al-Assad's regime has left a power vacuum, sparking competition among various factions and raising the risk of intensified violence. The region remains mindful of the recent turmoil in Libya and Iraq, where the removal of long-standing leaders led to even greater instability.
The events in Syria also affect the two main allies of Assad's regime, Russia and Iran, weakening their stance. This is significant because they are important oil producers.
Nevertheless, the uncertainty caused by the upheaval in Syria and the takeover of power by HTS, an Islamist group Hayat Tahrir al-Sham led by Abu Muhammad al-Julani and the Syrian National Army, as well as the situation on the front in Ukraine, was counterbalanced by weak demand for oil products in China and high supply in the markets.
As a result, the increase in oil prices was limited. As Bloomberg points out, some players are even reducing prices for certain regions—like Saudi Aramco, which lowered them for Asia.
