Oil Prices Likely To Rise Significantly Following Middle East Unrest
With tensions continuing to rise right across the Middle East, there is mounting concern over the stability of global oil supplies. The prospect of civil war in Iraq and its potential overspill into neighbouring countries is continuing to drive the price of oil higher and higher.Iraq is one of OPEC’s largest crude oil producers and there is a chance that Baghdad could lose control over the southern states of Iraq which at the moment produce around 2.5 million barrels of oil exports.
It is thought that the southern states could end up forming an allegiance with Iran. If this happened, and control was lost over Iraqi oil exports, many think that the US will be motivated to step in and initiate air strikes in the region.
This comes on top of already fragile global oil supplies due to similar tensions in the Ukraine as well as political issues in Libya.
Regardless of the issues in Iraq, the EIA have already forecast a rise in oil prices due to seasonal factors such as the April-September ‘summer driving season’ which has resulted in a 4 cent rise in prices compared to this time last year.
Many believe that oil prices will continue to rise as tensions continue in Iraq and there is no end in sight to the problems in Russia and Ukraine.