Involvement by the US and Russia in Syria is boosting oil prices.
Tensions in the Middle East have pushed oil prices higher. The meeting of government leaders in Ireland highlights the tensions regarding Syria as Russia stands alone in supporting the Syrian government. The US, UK, and France are supporting the rebels while Canada maintains a pro-rebel/uninvolved/keep-my-distance stance.
Prices moved to a nine-month high at $98.25 a barrel as the geopolitical stress pushed prices higher. Results are tracking a slim 0.1% below our forecast prepared early this year. Syria does not contribute a significant amount of oil to the world supply, but its proximity to major oil producers is a cause for concern.
Russian has labeled the rebels as “cannibals” while President Obama has said that the Syrian government has crossed a red line with the use of chemical weapons. Ongoing civil war and the potential for escalation by the US-backed faction and the Russian-backed Syrian government is likely to push oil prices higher in the coming months.
Plan on higher energy costs through the near term stemming from political causes, not normal economics.