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The Conflict in Syria: Key Issues and Consequences on the International Market of Crude Oil

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  • Mariana Papatulica

Abstract

At the end of August 2013, the international prices of Brent crude rose to a 17-month high ($ 117.8 /barrel) as Western powers, mainly USA, readied a military strike against Syria, and traders and analysts cited concerns over stability in the Middle East. The main concern was the risk that Western intervention in Syria could prompt a wider regional conflict, given the support that Iran has provided to the regime of Syria. The attack failed to materialize, because U.S. and Russia reached an agreement with the goal of disarming Syria’s chemical weapon arsenal, and consequently the prices declined, but the risk of geopolitical and social unrest movementsAlpha is still high, so that a reactivation of geopolitical tensions in the extended area of Middle East and north Africa is anytime possible with the afferent disruptive effects on the international oil market. We tried to answer to some questions in order to clear up the background of the problem: 1) What was the real stake of the U.S. plan to intervene in Syria: the concern generated by chemical weapons or U.S. geostrategic interests in the wider Middle East? 2) Why Syria matters to oil market, given that it is not a major oil producer (as was Libya), nor is it a major transit point for oil and gas exports (as is Egypt)? 3) The aftermath of a serious military action targeted against the Middle Eastern country and “qui prodest†? 4) Will Iran’s possible return to the world oil market send oil prices down, and how much?

Suggested Citation

  • Mariana Papatulica, 2013. "The Conflict in Syria: Key Issues and Consequences on the International Market of Crude Oil," Revista de Economie Mondiala / The Journal of Global Economics, Institute for World Economy, Romanian Academy, vol. 5(3), September.
  • Handle: RePEc:iem:journl:v:5:y:2013:i:3:id:2822000008752055
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    Keywords

    Syria; Iran; geopolitical risks; conflict; oil price; oil market;

    JEL classification:

    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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