The recent outbreak of war between Israel and Gaza, a month ago, raised fears of an increase in oil prices due to the conflict occurring in the Middle East, a region rich in oil resources. However, this did not happen. Brent crude, which is the international oil benchmark, is currently selling for about $80 per barrel, a lower price than when the war began.
The New York Times quoted analysts stating that the primary reason for the absence of a rise in oil prices is that the fighting between Hamas and Israel, regardless of its intensity, has not resulted in significant supply disruptions. Richard Bronze, head of geopolitics at Energy Aspects, a London-based market research firm, noted that traders are aware of the risks, but this has not led to much purchasing activity.
Raed Qadri, managing director of energy and climate at the Eurasia Group, a political risk consultancy, mentioned that it is unlikely for traders to raise prices unless the market inventory runs out. Furthermore, the American newspaper pointed out that the market has returned to a pessimistic mood regarding future oil demand, dominated by economic concerns about China, the largest oil importer, and other major consumers.
Saudi Arabia and other producers are trying to support prices by reducing their oil production. Experts warn that 2024 could be a challenging year for oil markets.
