PARIS, France: Fears of fresh escalation in Syria’s war coupled with compliance with a pledge by the OPEC cartel and Russia to limit production are keeping oil prices at current high levels, the International Energy Agency said Friday.
However a string of tit-for-tat tariff announcements by the world’s top economies the United States and China has sparked worries that prices could suffer should their dispute descend into an all-out trade war.
“Political uncertainty in the Middle East has returned to the fore in recent days. As we write, uncertainty about the next steps in Syria and Yemen have helped propel the price of Brent crude oil back above $70” per barrel, the IEA said Friday in its monthly report.
Western powers were continuing to weigh their options in Syria Friday, though US President Donald Trump appears to have backed away from imminent action after threatening strikes against President Bashar al-Assad’s regime following an alleged chemical attack.
Nonetheless, “oil market participants remain circumspect even though the geopolitical situation in the Middle East has eased somewhat,” Commerzbank Commodity Research said in a note.
The price of oil was also supported by a drop in production by the Organization of the Petroleum Exporting Countries (OPEC) and Russia, as they continued to comply with a 2016 deal that was reached in Vienna after prices crashed amid a global glut, the IEA said in the report.—AFP