HomeMediaLatest NewsHow the Israel-Hamas conflict affects the oil and gas market

How the Israel-Hamas conflict affects the oil and gas market

10 October 2023

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to the Rambler/Finance portal on the possible consequences of the new Arab-Israeli conflict for the world oil and gas markets.

According to the expert, serious changes due to the Palestinian-Israeli conflict in the oil and gas sector are not expected:

"So far, there is no special reaction in the oil market. It was not expected, because all the main mining areas are far from the conflict zone. And so far it is unlikely that any of the oil-producing countries, including Iran, will be involved in this conflict. Now it looks like the military actions will be limited to Gaza and the surrounding territories. Of course, the risk for the oil sector remains, but at present it can be assessed as insignificant."

At the same time, the analyst assessed the forecast according to which the conflict in the Middle East could provoke an increase in world oil prices. Thus, experts of the Politico magazine previously noted that the conflict could lead to tougher US sanctions against Iran, which supports Palestine, jeopardize the prospects for building normal relations between Saudi Arabia and Israel, as well as worsen the situation in the Middle East.

"I don't think the US will tighten sanctions [against Iran]. Formally, they are already very tough, and there is nowhere to tighten them further. Another issue is that in the last year and a half, the US regulators have informally turned a blind eye to the growing export of Iranian oil. But this was due to the fact that Iranian oil is simply needed on the market in conditions when the United States, by imposing various sanctions, exposes oil supplies from Russia to risks. The increase in the supply of Iranian oil, as well as Venezuelan, in the last year and a half has been one of the main ways to compensate for the loss of Russian oil. And I don't think anything will change in this regard in the coming months. There are no new sources of oil on the market that could in turn compensate for the lack of Iranian oil," Belogoryev said.

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