By Vestnik Kavkaza
In the context of Washington’s threats to strike against Syria, many predicted the growth of prices up to $150 per barrel. However, experts think that there will be no price boom by the end of 2013.
“In the winter of 2012 everyone said that there would be bombings of Iran, and oil prices would rise to more than $200,” Alexei Belogoriev, deputy director of the Institute of Energy Strategy, reminds. “About every two years there is such breaking news. Indeed, the Syrian card is already largely played, if, of course, the conflict does not move to Jordan, if there are not any bombings, rocket attacks on infrastructure in Saudi Arabia.
In general, when it comes to a realistic scenario, the plans of the West and the Arab countries are still a limited military operation. Obviously, it will not explode the situation. We expect at the end of the year that growth will not exceed $124, that's the limit, and then it will be connected in many ways with a fall of the dollar against other currencies, against the euro. Since we measure the oil price in dollars, this is a direct consequence. The situation in the Middle East, in fact, already will not have a major impact in the coming months.”
“It all started with the application of representatives, analysts of the French banking group "Societe Generale",” Dmitry Alexandrov, Professor of the International Energy Business of the Gubkin State University of Oil and Gas, says. “The statement of the bank's representative in New York, Michael Whitner, said that a possible attack on Syria will affect the region, could spread to neighboring countries and lead to disturbances in the supply of raw materials throughout the Middle East. In this case, the price of a barrel of North Sea Brent crude oil mix could reach $150. In the event that an attack on Syria will not affect the channels of oil, the price of oil in the next few days could rise to $125. This is the prediction of "Societe Generale".”
Alexandrov thinks the military conflict there, a further rise in oil prices may be real, but not so significant: “In principle, there are still so-called market regulators - the expectations of investors. The idea is that high prices "cool" the economy, slowing it and causing additional inflationary burden. In this case, some large projects may be suspended, and this just compensates the need for additional oil supplies. Therefore, as for an answer to the question of whether other OPEC countries, particularly Saudi Arabia, can increase the amount of oil produced - I can tell you that they can. As for the share of Russia in the export of oil, in my opinion it will not fluctuate significantly. If journalists believe that it is possible to take advantage of such a situation and to correct some countries’ situations, then perhaps it would be some short-term trend, which in general will be smoothed out in the future.”
Meanwhile, according to Vyacheslav Kulagin, director of the Center for Global Energy Markets of the Energy Research Institute of the Russian Academy of Sciences, “as Syria is in the Middle East, and everything to do with the Middle East is always of particular interest in terms of oil, in terms of oil prices and the impact on the energy market of what is going on there. I must say at once that, in fact, a number of statements were recently made on changes in oil prices. But it should be noted that, if we talk about some of the fundamental reasons for these changes, they generally do not exist. As Syria is not a major player in the energy market, indeed the export of Syria and the production are not as significant as that of the largest exporters of our world, and we all know that already the package of sanctions against Syria is effective, and for a long period the EU, in particular, has not been buying oil from Syria. So, really, there will be no significant loss for the oil market or changes in prices due to a lack of oil, especially if you even compare the situation with what we have seen recently in Libya, these are completely different players in the energy market.”
However, it is very important that Syria is an element of the Middle East, and the situation can really develop into something bigger, in which major suppliers will be involved. “If there in this process Iran, Iraq, Israel, Saudi Arabia and Qatar are included, shocks to the market will indeed be possible, and these shocks are much more serious than a $150 oil price. And generally speaking again about the region, it is important to note that Syria has good potential in the future. Now it is not a key player in either the regional or global energy markets. But, if we look at the map, we can see that just through Syria there is a nice shortcut to bypass the straits to the Mediterranean, the routes for oil and gas supplies from the Middle East, the so-called alternative to the Red Sea and other routes.”
Kulagin notes: “Syria is of great interest to the energy market. Here I have one more thing to say: it is, in fact, a potential competitor to Turkey, because Turkey is a transit link, the main transit link between the Middle East and European countries, and Syria may join the competition. So, really, this player, even though it is now very small for the energy market, has really a lot of weight.”
