Financial Sense
In
the past, military conflicts in the Middle East and the attendant
threat of supply disruptions would send oil prices soaring. Today, oil
prices are falling even as the region is seemingly unraveling. Civil
wars are unfolding in Iraq, Syria, and Libya, atrocities by ISIS have
the western world mounting military action, and Hamas and Israel are
coming off arguably the most intense period of conflict in years. The
region feels like a tinderbox. Oil supply has already suffered in Libya
and Iraq and the threat of production losses is looming over other
countries in the region.Historically, such widespread unrest would have caused global oil prices to march higher, but instead of rising against the backdrop of heightened geopolitical risks, Brent, the global price benchmark, has recently sunk below $100 a barrel. Despite the unrest in the world’s most important oil producing region, the price of Brent is now actually 16 percent lower than it was in June.
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