Commentary: A wider Middle East war doesn’t have to mean higher oil and gas prices
Published On Oct 1, 2024, 5:48 PM
The article discusses the implications of renewed conflict in the Middle East, particularly regarding oil prices. Despite rising tensions and missile attacks between Iran and Israel, the author argues that a wider war doesn't necessarily equate to skyrocketing oil prices. The global oil market believes that oil supplies from the region will continue, as challenges from conflict could be mitigated. Key players, including the U.S. and oil-producing nations, have vested interests in preventing oil supply disruptions, indicating that oil prices may not spike dramatically even if conflict intensifies.
Stock Forecasts
USO
Negative
Given the current geopolitical tensions, oil prices have shown a modest increase, but the likelihood of significant disruptions is low due to the vested interests of major oil producers and strategic considerations. As such, investors may see oil stocks stabilizing rather than escalating significantly.
XLE
Negative
China's increasing influence as a buyer of Iranian oil suggests that significant price spikes are unlikely even in times of conflict, as China would influence Iran to avoid any disruptions.
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