An
armed conflict between Riyadh and Tehran would have a major impact on
oil markets and the global economy. RT asked experts what a war
between the two Middle East superpowers would mean for crude prices.
If
a conflict happens, oil prices could increase 500 percent.
“Energy
prices will seriously depend on the severity of the conflict. Let's
remember the unrecognized Iraqi Kurdistan, which in a state of
continuous war exported about 550,000 barrels per day through Turkey.
In this connection, we can expect a panic rise in oil price to
$150-$200 on the first day of the conflict… If Saudis and Iran
attack each other's oil facilities, crude prices can skyrocket to
$300,” Mikhail Mashchenko, an analyst at the eToro social
network for investors told RT.
Ivan
Karyakin, an investment analyst at Global FX, points out that the
area of possible conflict pumps a third of global oil. Saudi Arabia,
Iraq, Iran, the United Arab Emirates, Kuwait, Oman, and Qatar
together produce about 28 million barrels per day, which is slightly
less than 30 percent of global production; prices will go up
immediately to $150-180 per barrel, he said.
“Then
everything will depend on the duration of the conflict. The world
market will survive two or three days of the conflict. If the
conflict lasts a week, then prices will rise to $200 or higher, and
this will have long-term consequences, as stockpiles will decrease,”
Karyakin said.
The
analyst insists a war between Riyadh and Tehran is unlikely, as it's
not in the interests of Russia and China.“Russia is a partner of
many conflicting countries in the Middle East. Largest oil importer
China, which carries the greatest risks in the event of a rise in oil
prices, will use all its influence on Iran and the US to prevent a
conflict,” he said.
A
war in the Middle East will be very unprofitable for importers,
according to Ivan Kapustiansky, Forex Optimum analyst. “In the
event of war, markets may lose about 20 percent of the world supply.
First of all, of course, the largest importers will be affected.
These include the US, China, Japan, as well as the eurozone, in fact,
the main locomotives of the world economy,” he said.
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