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Syria Crisis Raises Tensions...and Oil Prices

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.

Discuss this Blog Entry 1

on Jun 18, 2013

you know, when hasn't there been unrest in the middle east. this seems a pretty hollow excuse to raise oil prices anymore

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Brian Beaulieu

Brian Beaulieu has been an economist with ITR Economics since 1982 and its CEO since 1987. He is also Chief Economist for Vistage International and TEC, global organizations comprised of over 13,000...

Alan Beaulieu

One of the country’s most informed economists, Alan Beaulieu is a principal of the ITR Economics where he serves as President. ITR predicts future economic trends with 94.7% accuracy rate and...
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