– In its October 2023 Commodity Markets Outlook, the World Bank outlined three scenarios for oil prices in reaction to the ongoing tensions in the Middle East. In its most pessimistic scenario, around 8% of global oil supplies could be disrupted, leading oil prices to cross the US$ 150 per barrel mark. One has to ask how likely that scenario is.
– At the beginning of the conflict on 7 October, oil prices soared as many feared the worst case scenario. It was a question of time before those fears dissipated and the realisation that no supply disruptions subsequently occurred.
– Meanwhile, the macroeconomic outlook continues to weigh down on oil demand.
– Gas prices in Europe have increased but this is more an expected development at this time of the year and less than of a reaction to the conflict.
– If supplies from Egypt are disrupted that could put an extra pressure on prices. Israel, however, is a marginal player volume wise to significantly affect prices.
“Oil market: Shifting expectations“, Dr Carole Nakhle, Jul 2023
“Europe deepens dependence on Qatari gas despite Gulf state’s Hamas links“, Dr Carole Nakhle, Oct 2023
“Oil markets react to rising geopolitical tensions“, Dr Carole Nakhle, Oct 2023