The war in the Middle East, which began after the Hamas terrorist group attacked territory in Israel last Saturday night and which initially caused hundreds of deaths, has set off alerts in the markets.
The most watched indicator this Monday was the price of oil, because the conflict zone has the potential to interfere at a certain moment with important hydrocarbon producers, such as Iran and Saudi Arabia.
This conflict is reminiscent of the one that occurred just 50 years ago in the same area. After the Yom Kippur War in 1973, The oil blockade of the Arab countries towards the West dramatically boosted international crude oil pricesand caused a great impact on the global economy, even leading it to a recession.
However, market analysts considered this Monday that, in light of the first events and given the particular conditions of each producerwe are far from a scenario similar to that of those years, when prices tripled in a matter of days.
However, it is certain that the markets and the economy in general will suffer.
To begin with, we talk about risks in inflation, movement or readjustment of portfolios due to the fly to qualityas well as capital volatility due to risk aversion.
Why won’t it be the same as in 1973?
An analysis by Bloomberg, together with other market analysts, concludes that we are currently not in the same scenario as 50 years ago, when the global economy practically collapsed due to the excessive increase in oil prices in the face of a war conflict in the region.
The current scenarios are different, here are some differences.
– To begin with, there is a surplus oil market at the moment, let us remember that the main producing countries deepened the cuts to their production to contain the fall in international prices. An eventual spike in prices could easily be counteracted with a change in production levels.
– Although an increase in the price of oil would obviously immediately benefit the producing countries, they know that it would also lead the world to a slowdown and, eventually, a recession. Therefore, it is likely that this commodity will be subject to global control mechanisms before it could shoot to $200 or more, although it is likely to rise above $100 per barrel.
– The United States is a major oil consumer, but at this time it has sufficient reserves to reduce pressures.
– In 2023 the world is different, more alternative energies with fewer and fewer alternatives, although the demand for oil remains solid and moves the world, there is a marked shift towards new, no longer so new in some cases, energies. It is expected that by 2030 electric cars will increasingly begin to dominate the market.
OPEC increases its crude oil demand forecast until 2045
According to their figures, oil consumption would increase up to 16 percent in the next twenty years to a total demand of 116 million barrels of oil per day.
In this context, the land transportation, petrochemical and aeronautics industries would be the drivers of this increase.
The above, despite the fact that the planet is abandoning fossil fuels to prevent devastating climate change.
“There has been a backlash against the view that the world should turn its back on fossil fuels, while other energy policies and goals are weakened by costs and a more detailed understanding of the magnitude of the energy challenges,” said OPEC Secretary General Haitham Al Ghais.
However, few consider the incessant use of hydrocarbons sustainable within the time frame foreseen by OPEC.
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