The war between the USA and Israel with Iran has raised oil prices on global stock exchanges. On March 2, the price per barrel of Brent crude oil on the London exchange increased by more than 5 dollars, and the price per barrel of Light crude oil on the New York exchange rose by more than 4 dollars.
What effects might the rise in oil prices have on the global economy and the Azerbaijani economy? How high could oil prices rise approximately as the war continues?
Speaking to Medianews.az on the issue, economist Natiq Jafarli stated that the rising tensions in the Middle East and events surrounding Iran had to affect prices; this was expected: “Oil has already surpassed 80 dollars on the global market. This means an increase in oil revenues for Azerbaijan. However, I do not think the price increase will be long-term. Everything depends on how long the war and the tension continue. If the process concludes shortly, a trend of price decline will begin again.”
The economist emphasized that the current price increase has no fundamental economic reasons: “There is neither a production problem nor an observed shortage of oil on the world market. On the contrary, the OPEC+ coalition has decided to increase daily crude oil production quotas by more than 200,000 barrels starting April 1. So the issue is not related to production. The main risk is logistics, especially the Strait of Hormuz, and the tension due to the war. Prices will fall as soon as the tension decreases. However, if the conflict lasts long-term, oil prices could rise to up to 90 dollars.”
Nailə Qasımova,
Medianews.az