U.S. Consults Oil Experts As It Weighs Action Against Syria

Tuesday, September 3, 2013

In a recent article in Reuters, the authors wrote:

Oil analysts have said a quick strike against Syria could push prices up to $125 to $130 a barrel, with Societe Generale saying prices could reach $150 a barrel if the crisis were to spill over into larger oil producing countries.

Even though the United States is in the midst of its biggest oil drilling boom in decades, with production at the highest level since 1997, prices would still likely spike if there was a major supply disruption in the Middle East.

The North Sea Brent crude benchmark that helps set the majority of world oil prices traded around $114 per barrel on Thursday, near the $120 level that analysts say could push the White House to begin considering using the SPR (the Strategic Petroleum Reserve).

Syria has not exported any oil since late 2011, when international sanctions came into force. Prior to the sanctions Syria produced 370,000 barrels per day (bpd), roughly 0.4 percent of global supplies, and exported less than 150,000 bpd, mainly to Europe.

But there are concerns that a U.S. strike could cause the Lebanese militant group Hezbollah, which is backed by Iran (an OPEC nation, using oil revenues) and has been involved in fighting in Syria, to carry out retaliatory attacks in Turkey, Jordan, or oil-producing Iraq.

One of the sources who has spoken with U.S. officials said there is a concern that Iran, which has supported Syrian President Bashar al-Assad, may walk away from talks on its disputed nuclear program (also paid for with oil money made artificially expensive by OPEC's illegal price fixing).

The unpredictability of what action the United States will take, and what happens afterwards, has helped push markets higher, said Charles Ebinger, head of the energy security initiative at the Brookings Institution. (Read the rest here>>>)

Are you tired of worrying about the economic and political consequences of events in the ever-tumultuous Middle East? Then join us in getting the Open Fuel Standard Act passed into law. Within three years, this bill will begin stripping oil of its strategic status, which means it will strip the Middle East of its strategic status. We need your help. Start here.

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