Oversupply dynamics in the global crude market are expected to cushion any major shock to oil prices if US President Donald Trump chooses to take military action against Iran after anti-government protests in the country.
The global energy market will see a knee-jerk reaction in the short term, but it is expected to settle down and the overall impact on pricing will be subdued, said Manpreet Gill, chief investment officer, Africa, Middle East and Europe at Standard Chartered. This outcome was similar to what materialised after the outbreak of the 12-day Iran Israel war last June.
“We don't have to go back that far in history ... we had a spike in the regional tensions last year when oil prices did rise, but took a full circle,” Mr Gill told The National.
“That is a great example of separating what can be short-term sentiment-driven moves, versus where the demand supply fundamentals are.”
The intensity of the overall short-term global oil prices will depend on how Washington’s threats to take military action against the Iranian regime will pan out.
Continue Reading on The National UAE
This preview shows approximately 15% of the article. Read the full story on the publisher's website to support quality journalism.