Is energy prices about to shoot up?

[The Sceptical Chymist]

Israeli terrorist bases

My gratitude for explaining this whole situation to idiots like myself who don't watch news and thus have no clue what's going on in the world--and I'm dead serious, I'd no idea any of this was happening.

Ah, that word terrorist....it's just lost its meaning over the years (if it ever really had one).  I'm not picking any sides politically, but boy oh boy if you called any Israelis terrorists in the US you'd probably be called an anti-semite and so forth, because it's taboo to criticize their government or anything about them basically.  Again, I'm ignorant of world affairs so I couldn't choose a side even if I wanted to; just saying that you'd never, ever see a phrase like "Israeli terrorist" in the Western media.

Now, about those energy prices.  My guess is that the effect of all of this conflict would be pretty hard to predict.  Economists have tried to in the past (with respect to gas prices, for example) and they've turned out to be entirely wrong.  So I'm hoping if shit goes totally south in the region shown in the OP, it'll spur a move toward energy sources that wouldn't be affected by war in the middle east, in Asia, or anywhere else.  Kind of like how lab-made diamonds might cure all of the corruption that's infested the diamond market for many, many years.

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[Lucius]

I am far from justifying what Hamas did, but crime is not answered by committing even more crimes.

I'm curious whether you think when Ukrainians attack Russian invaders in their own homes they are also committing crimes? If not then why do you think Palestinians attacking Zionist invaders in their own homes is a crime?

Regardless of your personal position, there is no justification for what Hamas has done, killing children, women and anyone who came across its path, and abducting hundreds who are now being held hostage. Fighting for one's country does not justify crimes against civilians, no matter what war we are talking about.

This should be a discussion about the economic effects of the war, so I will refrain from commenting on politics in the future.

[pooya87]

but President Biden's latest statement about a "humanitarian pause" marked a shift in the position of the White House. 

Unfortunately I don't think this statement is indicating the end or any kind of serious ceasefire. The goal of this statement is purely to affect what Hezbollah is going to say and do at 15:00 (local time) today, which is the deadline Hezbollah dictated. I bet the video released as a reminder of how they easily attacked Sa'ar warship back in 2006 had a significant effect.
How much does an aircraft carrier like USS Ford cost? $13 billion + cost of 50-60 aircraft + 4500 personnel? That's enough dissuasion.

After all it all comes down to the costs. US Senate just approved to waste more than $14 billion of taxpayers money on Zionists! That's on top of the billions they are already paying Israel. I already covered the effects on energy market.
I'm sure those in Washington can come up with a much better and more detailed version of what I posted here that covers more than just CENTCOM region. After all United States is at war with the rest of the world, the costs is so much higher that what I can cover inside one post:
The proxy war with Russia, the proxy war with China, the proxy war with Iran, proxy wars in Africa and now an actual armed conflict they are caught in inside a prison called Gaza.

The cost is not only economical. US military is getting the worst of it, specially after yesterday where they sustained largest losses over the past 28 days.

On top of it all we also have Russia advancing in Ukrainian soil because US literally pulled everything back from troops and proxies to weapons they were supposed to use to stop Russian progress!

but boy oh boy if you called any if you called any Israelis terrorists in the US you'd probably be called an anti-semite and so forth,

Yeah.
The absurdity of it is that the 9000+ Palestinians who were murdered by Israel over the past 28 days are Semites too!

[pooya87]

after Friday this battle could be entirely different, from genocide of Palestinians halting abruptly all the way to US aircraft carriers sinking to the bottom of Mediterranean sea.

First to understand the significance of the Fridays speech by the Hezbollah leader it's enough to say that during the hour long speech that an estimated 3 billion people  across the globe watched simultaneously, there was a deafening silence and ceasefire in West Asia.

I don't want to get into the details of what was said because it would turn this into a military and political topic. But the part that involves economy is both good news and bad news:
- Good news: despite the speculations over the past couple of days this was a very calculated speech that outlined the situation precisely and left every possibility open as operations will continue happening and expanding but without entering the new phase of the war which is a significant expansion and heavier attacks.
In fact oil price even reacted to this by going down a little which is good news for economy.

- Bad news: is that the conflict is expanding at the same pace as before since the genocide has not stopped and United States regime is desperately trying to keep the carcass of Israel alive. After the speech yesterday we have the simultaneous attack on Israeli and American positions from 5 fronts. In decreasing order of intensity: Palestine (Gaza and West Bank), Lebanon, Yemen, Iraq and finally Syria.

On another news we have Algerian parliament passing a law that unanimously voted to support Palestine militarily. This allows President of Algeria to enter the war against Israel if he chooses to. To understand the significance of it specially on economy you have to look at where Algeria is located. That is another strategic chokepoint, Strait of Gibraltar, which is another access point Europe has to open seas for trades. If the war expands it will also affect the international trades going through this strait which has a significant effect on the economy.

This is also significant regarding energy price and shortage. Algeria has acted as one of the sources to cover part of the EU gas shortage after Russian exports to Europe decreased. They exports most of their natural gas to Europe through 4 LNG terminals and the Trans-Mediterranean pipeline. If we enter this phase, a "gas embargo" on Europe is a possibility.

[Bananington]

I have understood from the isreali-palestinian war that  it is more from a religious point of view, or that's the way they reported it and want it to be. If care ain't taken, this could result in WW3 as speculated and by then I doubt anyone would be bothered about the prices of gas, rather, to survive the times and secure the trade routes from total destruction.

I believe that unlike what we experienced during the start of the Russia-Ukranian war, wherein gas prices skyrocketed due to trade routes being blocked or restricted, this Isreali war might soon be faced with such proposition of having to resort to alternative sources of energy inorder to survive. Sure the prices of energy will increase once other countries get involved and the war escalates further rather than dissipate with negotiations or agreement.

[DrBeer]

The UAE showed its civilized face and chose to side with Israel. This means that one of the largest suppliers of oil to the world market will not play into the hands of supporters of destabilization of the energy market and will be able to become an element of stabilization of the oil market. 

UAE condemns Hamas attack on Israel and hostage-taking
The UAE's stance differs markedly from the comments of most other Arab countries in the region, which held Israel responsible.

https://www.reuters.com/world/middle-east/uae-calls-hamas-attacks-israel-serious-grave-escalation-2023-10-08/

[bluebit25]

I am also paying attention to the conflict issues in this area and am also sensing some changes in energy prices, but at the moment I only see a small impact on food prices, and fuel prices don't vary too much where I live.

Unlike the period between the conflict between Russia and Ukraine when fuel prices were more volatile, or perhaps in the near future we will also have to accept price increases of many different things when the conflict may arise spokes are wider.

Another question I have been discussing with others is whether WW3 is happening or about to start?

Because as far as I know, tense issues, especially in Asia, are becoming more and more complicated. Earlier this week, there were some statements from the president of North Korea about possible support for Hamas, or tough statements. with Japan.

And if the conflict really continues and widens further, energy prices will certainly increase a lot, hopefully this will not happen.

[pooya87]

The UAE showed its civilized face and chose to side with Israel.

One of the good things in every conflict is that the weasels show their true faces. Although it was not a surprise to know all dictatorships like UAE stand with the terrorist organization but making it clear as day is good news. Of course this all makes the next step easier, which would be the consequences of supporting terrorism, sending fuel for the bombers of Gaza and arms to be used in ethnic cleansing of Palestine.

will be able to become an element of stabilization of the oil market. 

Sending fighter jets, bombs and fuel for tanks and aircraft used in bombing civilians is not going to have any effect on the global oil market whatsoever. If anything it could decrease the global supply (as part of the supply is now going to "fuel" war) and could destabilize the market even more.

[Sayeds56]

I'm not an expert in geopolitics, but my thinking is that a real war in that area can only happen if Iran intervenes. Although so far we have heard a lot of harsh words from Iran, for now it seems that everything will remain only on threats, and all the other incidents that you have already mentioned are only isolated incidents that cannot significantly disrupt traffic through the Suez Canal, and even less through gas pipelines or oil pipelines.

Since Russia attacked Ukraine, some things have changed significantly in the EU, which means that many alternative sources of oil and gas supply have been found, primarily from the US and Africa (Algeria, Nigeria) and increased production from Norway. The latest data indicate that EU gas storage facilities are about 99% full, and temperatures are still around 20 degrees Celsius (daily), and long-term forecasts point to a relatively warm winter.

In addition, progress is also being made in terms of using energy from renewable sources.

Thanks for your insightful analysis of the evolving geopolitical situation in the Middle East. I agree with your perspective that existing  threats are likely to persist  and Iran will not involve in this war. It is evident now that global economy is now held hostage by regional conflicts and their impact on oil prices is a major concern for the whole world. In order to safe world economy from recurring such unfortunate scenarios, a lasting solution would involve reducing reliance on fossil fuels and embracing renewable energy resources.

[electronicash]

Algeria taking Palestine side will cause tension in that area as well which they will also barricade their fleet close the Gibraltar strait. since they are taking this war as religious war, Algeria is a Muslim dominated country and pretty sure they will be with Iran.

once they declare war, none will ever go through that route and those inside the Mediterranean sea are trapped. for now we might be seeing the gradual rise of energy prices and we can only be sure whether the gas prices will sky rocket or not when the war breaks already.

[pooya87]

Algeria taking Palestine side will cause tension in that area as well which they will also barricade their fleet close the Gibraltar strait. since they are taking this war as religious war, Algeria is a Muslim dominated country and pretty sure they will be with Iran.

once they declare war, none will ever go through that route and those inside the Mediterranean sea are trapped. for now we might be seeing the gradual rise of energy prices and we can only be sure whether the gas prices will sky rocket or not when the war breaks already.

Just two corrections:
Algeria hasn't declared war yet, they just passed the law that opens the way for them to declare war if they feel needed.
Secondly what's happening in Palestine is crimes against humanity. It is not a religious war and it is not just against Muslims. For example the Israeli terrorists destroyed a church in Gaza that was over a thousand years old while slaughtering the Christians there. That's not to mention the Jews that Israel has slaughtered so far.

[DrBeer]

The UAE showed its civilized face and chose to side with Israel.

One of the good things in every conflict is that the weasels show their true faces. Although it was not a surprise to know all dictatorships like UAE stand with the terrorist organization but making it clear as day is good news. Of course this all makes the next step easier, which would be the consequences of supporting terrorism, sending fuel for the bombers of Gaza and arms to be used in ethnic cleansing of Palestine.

will be able to become an element of stabilization of the oil market. 

Sending fighter jets, bombs and fuel for tanks and aircraft used in bombing civilians is not going to have any effect on the global oil market whatsoever. If anything it could decrease the global supply (as part of the supply is now going to "fuel" war) and could destabilize the market even more.

That is, do you consider the strikes of the Israeli Defense Forces against the international terrorist organization Hamas... terrorism? No no - I'm not surprised by your statements! I would be surprised if you said otherwise But this is beyond the scope of the topic.
The bottom line is that the UAE did not take the side of Hamas and its puppet masters, and will not play to reduce oil production. It is now profitable for the UAE to sell expensive oil for a completely stable and liquid dollar, but not for rupees, yuan, or, worse, rubles. In this situation, the West will look for adequate suppliers, understanding where Hamas/Russia and others are going. And in general, there are fewer “those who like to destroy” in the Middle East - Qatar has signed an almost 30-year contract for gas supplies to the EU. Qatar also chose normal, stable buyers, and the EU chose an adequate, honest, predictable supplier. Therefore, it is most likely not worth expecting a long-term increase in oil/gas prices, because significant suppliers of the region are not interested in the development of the conflict and will not support it, choosing stability, business and mutually beneficial partnerships

[pooya87]

That is, do you consider the strikes of the Israeli Defense Forces against the international terrorist organization Hamas... terrorism?

Of course the Israeli terrorists have to call their civilian victims terrorists. ISIS use to call the civilians they killed terrorists too.

But in the real world according to the international law, people of the invaded country can use force to repel the invaders. Exactly like what people of Ukraine are doing these days. Ukrainian people are using force against the invading Russians, just like Palestinians are using force against the invading Zionists.
That is unless you are calling Ukrainian people terrorists too?!

Besides, Israeli terrorists are not fighting the armed forces of Palestine. They are murdering women and children. So far they have killed over 10000 innocent civilians, 4104 of which were children.
Not to mention that the Israeli terrorist targets are specifically civilian targets including hospitals and any medical centers, schools, concentration camps, press buildings and reporters, international aid groups such as UNRWA (UN agencies), even water tanks!
Even the ammunition the Israeli terrorists use are categorized as war crimes such as the phosphorous bombs they regularly drop on civilian concentrations that "boils" them to death..

No no - I'm not surprised by your statements! I would be surprised if you said otherwise

I'm not surprised that a Zionist is supporting the Zionist apartheid regime either

The bottom line is that the UAE did not take the side of Hamas and its puppet masters, and will not play to reduce oil production.

UAE as a member of OPEC has already reduced production. Like others, at this point none of them plan to reduce production and this has nothing to do with the genocide that is happening in Palestine.

It is now profitable for the UAE to sell expensive oil for a completely stable and liquid dollar, but not for rupees, yuan, or, worse, rubles.

LOL
https://new.thecradle.co/articles/the-first-china-uae-gas-deal-in-yuan-a-new-blow-to-dollar-dominance

Qatar has signed an almost 30-year contract for gas supplies to the EU. Qatar also chose normal, stable buyers,

LOL
https://www.al-monitor.com/originals/2023/06/china-signs-major-lng-deal-qatar-beijings-gulf-push-continues

[Kakmakr]

I think the Lebanese militant group Hezbollah are the spark for a full scale war in the region, with Iran following them when it happens and that will destabilize the whole middle east. Hezbollah is far more powerful than Hamas, so Israel will call in help from the US and that will escalate into a much bigger conflict.

The market will react because of the fear of a worst-case scenario, where a conflict in Israel magnifies throughout the region and affects global oil trade. A ripple in the pond ..always cause waves throughout the global markets and it just increase as the conflict escalate.

Iran asserts control over the passage of tankers through the Strait of Hormuz, a trading route that facilitates the transport of about 15% of global oil supply. 

[Sithara007]

✂✂✂✂
Iran asserts control over the passage of tankers through the Strait of Hormuz, a trading route that facilitates the transport of about 15% of global oil supply. 

It's not just the Strait of Hormuz. Iran-backed Houthis control vast swathes of Yeman, and they can block the oil transport through Red Sea, if they want. That would mean that the entire crude oil production in GCC region is taken offline. As of now, the net production of crude for each GCC nation is as follows (barrels/day):

Saudi Arabia - 9,060,000
Iraq - 4,340,000
United Arab Emirates - 3,250,000
Kuwait - 2,590,000
Qatar - 1,320,000
Oman - 1,100,000
Bahrain - 180,000

As you can see, these nations amount for close to 25% of the global supply of crude.

[pooya87]

so Israel will call in help from the US and that will escalate into a much bigger conflict.

Ever since the first week it has been US that is fighting Palestinians with their aircraft, ships and soldiers on the ground. In fact over the past 2 weeks the Palestinian freedom fighters have caught at least a dozen US marines as poisoners of war.

Iran asserts control over the passage of tankers through the Strait of Hormuz

It's not just the Strait of Hormuz. Iran-backed Houthis control vast swathes of Yeman, and they can block the oil transport through Red Sea, if they want.

It is not in Iran's doctrine to shut down any trade routes, nor is it in its allies doctrine. However, the actions of United States regime will have consequences one of which is these chokepoints being shut down.

That means if US regime decides to declare war on Iran they would put Iran in a position to have no choice but to respond to the aggression. In such a response, US navy is one of the legitimate targets and when an aircraft carrier group sinks in shallow waters of Persian Gulf, Suez Canal, Strait of Bab al-Mandab, Strait of Gibraltar or Panama Canal it makes maritime travel in those regions impossible.

We saw a small version of how it looks in the 80's when maritime transfer got shut down for a little while after US decided to declare war on Iran and Iran had no choice but to respond. On 14 April 1988 when Iran sank the USS Samuel B. Roberts in response to US aggression against Iranian soil, it took US military days to try and salvage the frigate and it finally took a 29000-ton heavy lift ship, a "monster" called Mighty Servant and $1.3 million to carry it to the repair port (~$90 million in total for repairs to make her seaworthy again).
That was just a small hole in the frigate's hull back when Iran had nothing and was fighting with repurposed fishing boats and shoulder launched RPGs that did nothing to a destroyer. In 2023 such response would be with heavy and large number of cruise and ballistic missiles, loitering munitions, fastest torpedoes on earth and stealth submarines which would leave nothing to be salvaged

[Juse14]

I think the Lebanese militant group Hezbollah are the spark for a full scale war in the region, with Iran following them when it happens and that will destabilize the whole middle east. Hezbollah is far more powerful than Hamas, so Israel will call in help from the US and that will escalate into a much bigger conflict.

What you are trying to explain, this is still a matter of pros and cons. This is a complex and decades-long conflict that involves various elements, including territorial, historical, religious and political issues.
The involvement of Lebanese militants, Hezbollah and other Arab countries is a form of solidarity as Arabs with Palestine, which has long been colonized by the Zionist Israel. Israel is an occupying country that is trying to annex the entire territory of Palestine, so that some Palestinians are forced to become refugees and live in various countries and refugee camps, while some other people are reduced in the largest prison in the world, the open prison in the Gaza Strip and all their access is closed and their lives are deprived by Israeli Zionists. And I think it is the western countries that turn a blind eye to this incident, including the United States, which is said to be a country that upholds human rights. But why did the US turn a blind eye to the victims of the war that took place in Palestine and to the deprivation of the right to live freely as a Palestinian people.

The market will react because of the fear of a worst-case scenario, where a conflict in Israel magnifies throughout the region and affects global oil trade. A ripple in the pond ..always cause waves throughout the global markets and it just increase as the conflict escalate.

Iran asserts control over the passage of tankers through the Strait of Hormuz, a trading route that facilitates the transport of about 15% of global oil supply. 

Trade routes will certainly be hampered and cause energy prices to soar, so that the global economy and trade will be hampered and slowed down.

[gunhell16]

According to my knowledge, Yemen is currently in an uncertain condition due to a civil war. The Houthis may seize control of the Bab al-Mandab Strait. And when this happens, there may be a jump in the price of electricity and other items.

Then there's the reality that the Bab al-Mandab Strait is a crucial chokepoint in both trade and energy, right? Because it will have an impact on our global economy.

[pooya87]

Then there's the reality that the Bab al-Mandab Strait is a crucial chokepoint in both trade and energy, right? Because it will have an impact on our global economy.

That's right. It is also interesting to know that China's first overseas military base is in Djibouti which is the other side of Bab al-Mandab from Yemen. That is another indication of the importance of this chokepoint for the international trade.
It is also interesting to know that this is one of the reasons why China started the One Road One Belt initiative to eliminate the need for all these "sea routes".

[DrBeer]

The big bang expected for oil prices this year is turning into a whimper.
Just a few weeks ago, Brent crude was on the verge of finally justifying industry forecasts of a return to the $100 a barrel level as record demand for the fuel and Saudi Arabia's supply cuts depleted global oil inventories. An outbreak of conflict in the Middle East shortly afterward increased the risk of a price spike.
But the benchmark fell to a three-month low below $80 a barrel on Wednesday. Supply concerns are giving way to doubts about falling refinery profits in China and Europe, weak physical cargo trade and an uncertain U.S. economic outlook.

https://www.bloomberg.com/news/articles/2023-11-09/oil-s-big-bang-turning-to-whimper-as-economic-outlook-darkens