How does a Middle East war affect ME?
The price of oil hit an all-time high of over $77 per barrel today. Okay, please somebody explain this to me:
The price is skyrocketing because of a war... over no oil reserves? Israel and Lebanon have essentially gone to war.
Neither nation has oil, so no oil reserves are threatened in their battle. Their skirmishes do not cross any oil shipping lanes, like the Suez Canal, so they're not disrupting the flow of oil through the region. They're not jeopardizing any pipelines.
Oil has steadily risen since Tuesday amid a steady stream of headlines out of Israel and concern the conflict could draw in Iran and Syria, Hezbollah's backers, and impact crude supplies. The concern is that the attacks could widen into a larger Middle East conflict and cut crude exports from Iran, the world's fourth-largest producer.
"Many analysts believe that the Hezbollah attacks on Israel were explicitly or implicitly sanctioned if not actually instigated by Iran," said James Williams, an analyst at WTRG Energy Economics in London, Ark. "While the volume of oil involved in the direct participants is minuscule the conflict always has the possibility of encouraging Hezbollah sympathizers to action in other arenas."
So why on earth is the price going north?!