Oil prices spike as rebels seize power in Syria, rattling markets
The fall of Bashar al-Assad, who had been in power in Syria for nearly 25 years, has impacted oil prices. This sudden change in the Middle East is a setback for Russia and Iran, which have supported the regime. Traders are factoring in the effects of the rebels taking control, and oil markets have responded with a rise in prices.
At the opening of trading on Monday, the price of the popular Brent crude increased to $72 per barrel, while American West Texas Intermediate surpassed $67. The notable movement in the markets is due to traders accounting for the impact of the coup in Syria.
Bloomberg reported on Monday that the collapse of Bashar al-Assad's regime has left a power vacuum, sparking competition among various factions and raising the risk of intensified violence. The region remains mindful of the recent turmoil in Libya and Iraq, where the removal of long-standing leaders led to even greater instability.
The events in Syria have also affected the two primary allies of Assad's regime, Russia and Iran, weakening their positions. This is significant as they are major oil producers.
Nevertheless, the uncertainty caused by the upheaval in Syria, along with the takeover of power by HTS, an Islamist group Hayat Tahrir al-Sham led by Abu Muhammad al-Julani and the Syrian National Army, and the situation on the front in Ukraine has been balanced by weak demand for oil products in China and high supply in the markets.
As a result, the increase in oil prices was limited. Also, as Bloomberg notes, some players are lowering prices for certain regions, such as Saudi Aramco, which has reduced them for Asia.
