Oil prices rose slightly following the ouster of Syrian President Bashar al-Assad, but the overall reaction remained muted.
Brent crude rose 1.15% to US$71.94 per barrel, while West Texas Intermediate rose 1.41% to US$68.15 per barrel on Monday. This change follows three consecutive sessions of decline for the two benchmark indices.
Although Syria is not a major oil producer – pumping only 40,000 barrels per day compared to more than 600,000 barrels per day in the early 2000s – its geographic location near key oil-producing countries like Iraq and Saudi Arabia added some geopolitical risk premium to the market. Analysts have noted that the fall of Assad, long supported by Russia and Iran, could have broader implications for the region’s political stability.
Traders appeared more focused on other factors, including signals from China. Beijing’s Politburo announced plans to adopt a “moderately accommodative” monetary policy, marking the first such change since 2008. The news boosted expectations of increased oil demand from the world’s largest importer of crude. Colin Cieszynski, chief market strategist at SIA Wealth Management, said China’s policy shift was a bigger driver of oil prices than the political upheaval in Syria.
In the broader financial markets, reactions have been mixed. Germany’s DAX index fell 0.19%, while France’s CAC 40 rose 0.72% and Britain’s FTSE 100 rose 0.52%. Asian markets were more volatile, with Tokyo’s Nikkei 225 up 0.18%, but South Korea’s Kospi falling 2.78% amid political uncertainty over impeachment issues. President Yoon Suk Yeol.
Even as Syria’s collapse adds a layer of uncertainty, traders remain focused on global oil supply and demand. Rising production from non-OPEC+ producers, such as the United States and Brazil, as well as OPEC+’s decision to delay production increases until mid-2024, kept pressures on the market in equilibrium for the moment.
