Conflict In Syria Pushes Oil Higher

In the commodities world, oil is undeniably one of the most important resources on the globe. Its price movements are closely tied to nearly every economic factor, as well as both domestic and international conflicts. In recent weeks, the escalating violence in Syria has put significant upward pressure on oil, pushing the fuel over $110 a barrel. While the country itself is not a major oil producer, its close geographic proximity to key sea routes and pipelines has investors understandably concerned over the immediate future of the commodity [for more oil news and analysis subscribe to our free newsletter].

Another cause for concern is whether or not the U.S., or other major economies, will intervene in the country’s conflict. More than likely, any type of intervention would significantly escalate the Syrian conflict and could potentially cause violence to spill over into other countries in the region where roughly one-third of the world’s crude is produced.

Syria’s Conflict Comes to a Boiling Point

Though recent events have brought this country’s conflicts back to the forefront, Syria’s civil war has been raging for more than two years. Most mark the official start of the war in February of 2011, when authorities arrested 15 school children for painting anti-government graffiti on walls of a school. News of the arrests spread quickly throughout the country, fueling massive and violent protests in Syria and sparking a national movement. Armed rebels quickly came to the public’s defense, standing against President Bashar al-Assad and his government [see How To Lose Money Investing In Commodities].

Two years later, the country’s fighting has claimed more than 100,000 lives, but now officials believe the conflict has “crossed the line,” forcing governments like the U.S. to assess whether or not an intervention is needed. According to President Obama and other leaders in Europe and the Middle East, Syria’s civil war warranted international attention after the Syrian regime launched a chemical attack on its own people.

Shortly following the attack, investors quickly responded, pushing oil prices to 18-month highs.

Syria’s Link to Crude

As mentioned before, Syria is not a major oil producer, but its proximity to crucial sea routes and pipelines has caused significant cause for concern. If violence were to spill over into neighboring regions, which produce approximately 30% of the world’s oil, there could be significant disruptions to the flow of oil through the Suez Canal in Egypt, as well as other pipelines in the area (pictured below) [see Mexico Takes Steps To End Oil Monopoly].

Source: EIA

According the the Energy Information Administration, 4.5 million barrels flow through Egypt along every day, which accounts for roughly 5% of global oil supply. Though some experts believe a U.S. intervention would not lead to a major disruption in supply, investors should certainly keep a close eye on the conflict, as tensions and violence could certainly make a turn for the worse on the drop of a dime.

Don’t forget to subscribe to our free daily commodity investing newsletter and follow us on Twitter @CommodityHQ.

Disclosure: No positions at time of writing

This entry was posted in Asset Allocation, Brent Oil, Commodity Futures, Commodity Producers, Energy, Natural Gas, WTI and tagged RDS. Bookmark the permalink.

Commodity HQ is not an investment advisor, and any content published by Commodity HQ does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities or investment assets. Read the full disclaimer here.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!