Oil Prices Little Affected by Middle East Turmoil


The advance of the ISIS-insurgents in Iraq's northwest has to date produced hardly a ripple on oil markets, ABN AMRO observes, with oil prices edging up by just a few US dollars. Given that oil production in Iraq's northeast has been blocked for several months already, the country's entire oil export is now coming from the southeastern city of Basra, where oil production and exports hit ten-year highs in May and June. 



The advance of the ISIS-insurgents in Iraq’s northwest has to date produced hardly a ripple on oil markets, ABN AMRO observes, with oil prices edging up by just a few US dollars. Given that oil production in Iraq’s northeast has been blocked for several months already, the country’s entire oil export is now coming from the southeastern city of Basra, where oil production and exports hit ten-year highs in May and June.

ABN AMRO is convinced, moreover, that neither neighbouring oil-producing countries nor the international community at large, and the United States in particular, will allow ISIS to gain control over the large oil fields in Iraq’s south. As a consequence, the bank’s economists see little risk of Iraqi oil exports coming to a standstill. Besides, any dip in Iraqi production can be offset by extra oil production in other OPEC countries, notably Saudi Arabia. Going forward, Iraq will remain a key oil producer as global – read Asian - demand continues to grow.

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