Source: Wall Street News
As the conflict between Palestine and Israel escalated, the Middle East dispute resurfaced. The oil price, which had already turned into a downward trend, suddenly ushered in a “bloody assist.” Oil rose nearly 4% overnight.
At the critical moment, it was previously reported that Saudi Arabia, which had already established diplomatic relations with Israel under the mediation of the US and raised oil production at the same time, said it would wait for guidance from crude oil market data for the next few months before deciding on the next oil policy.
On Sunday local time, Saudi Energy Minister Prince Salman told the media:
We may postpone deciding what to do, but I'm not abandoning the precautionary approach.
The OPEC+ coalition, led by Saudi Arabia and Russia, began cutting production in October last year, and the two major oil producers implemented additional voluntary production cuts in the first half of the year. Saudi Arabia and Russia have reduced oil production by 1 million barrels and 300,000 barrels per day, respectively, and this production reduction policy will continue until the end of this year.
Continued tightening of supply has caused oil to rise recently to a high level close to 95 US dollars. However, recent hawkish statements by the Federal Reserve have had a negative impact on macroeconomic prospects. Coupled with news that Saudi Arabia will make a settlement and that Saudi Arabia's production reduction policy will end, oil prices have dropped sharply. Until the conflict between Palestine and Israel escalated this weekend, oil prices rose again under the influence of geopolitical factors.
However, some market analysts point out thatThis rebound in oil prices may not last long, and the possibility that Saudi Arabia will maintain additional production cuts for a longer period is declining. It is the “general trend” for Saudi Arabia and Israel to normalize relations under US mediation. As a major oil producer, Saudi Arabia will also cooperate with Europe and the US in their efforts to vent inflation, and supply-side shortages may soon be alleviated.
The current conflict between Israel and Palestine occurred on the second day of the 50th anniversary of the Fourth Middle East War. During the 1973 Middle East War, Saudi Arabia decided to punish Europe and America in order to support Palestine and imposed a lengthy oil embargo, which led to a global energy crisis.
Editor/Corrine