By John Ikani
The overthrow of Syrian President Bashar Al-Assad’s government has sparked a notable surge in global crude oil prices.
Rising tensions and uncertainty across the Middle East have been major drivers of the upward trend in oil prices.
Concerns remain high, with Iran and Israel locked in escalating hostilities at the time of this report.
As of 0513 GMT, Brent crude futures increased by 36 cents, or 0.51%, trading at $71.48 per barrel. Similarly, U.S. West Texas Intermediate (WTI) crude rose by 38 cents, or 0.57%, to $67.58 per barrel.
Syrian rebels declared on state television that they had successfully ousted President al-Assad, marking the end of a 50-year dynasty led by his family.
The rebels’ victory has heightened fears of fresh instability in a region already enduring years of war and strife.
“The development in Syria has added a new layer of political uncertainty in the Middle East, providing some support to the market,” Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting, told Reuters.
“But Saudi Arabia’s price reductions and OPEC+’s production cut extension last week underscored weak demand from China, indicating the market may soften toward year-end,” he said. Market watchers are keeping an eye on any early signals of how U.S. President-elect Donald Trump’s policies on energy and the Middle East might affect market dynamics.
Meanwhile, Saudi Aramco, the leading global exporter of crude, slashed its January 2025 prices for Asian markets, bringing them to their lowest levels in nearly four years.
Last Thursday, OPEC+ delayed its planned production increases by three months, pushing the start date to April 2025, while extending the timeline for full production cuts to the end of 2026.
The OPEC+ alliance, which accounts for roughly half of the world’s oil production, had aimed to begin easing output cuts in October 2024. However, declining global demand and rising competition from other producers have repeatedly delayed the rollout.
In the United States, oil and gas drilling activities surged last week, with the number of active rigs reaching a peak unseen since mid-September. This points to increasing output from the world’s largest oil producer.
With forecasts of a supply glut in the coming year, Brent and WTI prices have both recorded losses over the past two weeks.
Amid declining prices, speculative traders increased their net long positions on U.S. crude futures and options for the week ending December 3, according to data released by the U.S. Commodity Futures Trading Commission.
