By Ben Geman - 08/27/13 03:43 PM EDT
“The market is concerned that the conflict would spread beyond the borders of Syria and ultimately impact crude oil supplies,” said Andrew Lipow, president of Lipow Oil Associates.
He noted that, for instance, neighboring Turkey is a major transit point for Iraqi oil that supplies European refineries. Syria is also near important marine shipping routes.
Guy Caruso, a senior adviser with the Center for Strategic and
International Studies, said that while the “immediate” reason for the
price jump is the potential Syrian action, other factors are at work.
“The underlying problem is relatively tight supply situation with continuing production disruptions in Libya, Iraq, Iran in addition to Syria, Yemen and Nigeria. Uncertainty in Egypt adds to the nervous market reaction,” Caruso, who led the federal Energy Information Administration under President George W. Bush, said in an email.
The escalation of the Syrian conflict is adding to what has already been upward pressure on prices in recent months, The Associated Press reports, citing the underlying Syrian civil war and unrest in Egypt.
“The political uncertainty across Middle East has dominated the oil market in the last few months, providing upside momentum as the political and economic conditions remain very tentative,” said a report from Sucden Financial Research in London that AP cites in this story.
This post was updated at 12:07 p.m.