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Main page > Comments > Actual topics > Middle East: risks and opportunities for exporters
Middle East: risks and opportunities for exporters
The situation in the Middle East remains a key international topic influencing the world market of hydrocarbons. Several lines of confrontation sharpen every month in this region. Conflicts of Iran with Israel and the West, even the recent EU’s decision to embargo signing of new contracts on oil imports from Iran, are just part of the problems.
It is no secret that the Sunni monarchies in the Persian Gulf could benefit from war of the USA and Israel against Iran. This, in particular, concerns Saudi Arabia and Qatar that compete against Iran for leadership in the Islamic world and fear the Iranian military might, especially if it is reinforced by nuclear weapons. In its turn, Tehran believes it is necessary to support the Shia, fellow believers, in Arab states, including Saudi Arabia, where the Shia are openly discriminated, although they reside in the country’s eastern province where major oil reserves are situated. Events in Syria are also the reflection of confrontation between Tehran and Riyadh with Doha that aim at overthrowing the Bashar Assad regime.
War becomes practically inevitable amid numerous conflict lines in the region and Iran’s steady intention to obtain a nuclear bomb that will make it much stronger than all its neighbors, both Arab states and Israel. War will start either because of the US attempts to unblock the Strait of Ormuz should Iran block it, or because of a preventive strike by Israel on Iran that is close to creating an atomic bomb, or because of Iran’s support to the Shia uprising in the Gulf monarchies.
Any military scenario means sharp decline in intensity of the oil tanker navigation in the region, large-scale drop in exports and revenues of the Persian Gulf nations. However, the market will become ready to accept alternative suppliers. Among beneficiaries there will be Latin America and Canada; production of hydrocarbons in the USA may rise, as well as LNG projects in Australia may grow. Russia will have fewer benefits from this situation. Over the past few years it has been keen on raising oil supplies to China, and it does not have a lot of reserves to quickly deliver more oil to the much promising European market.
By Stanislav Mitrakhovich, NESF leading expert
Special report:
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The year 2023 saw an even larger drop in Russian exports of pipeline gas to Europe. In the past two years, Gazprom failed to export some 120 bcm of natural gas, and these quantities are now locked up in Russia. Another difficult case concerns extension of the current gas transit contract with Ukraine, which expires at the end of 2024. Gazprom is already looking for new opportunities.New Logistics of Russian Oil Business
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