Oil Jumps as Arab Countries Cut Ties with Qatar

Oil Jumps as Arab Countries Cut Ties with Qatar

Oil jumps by 1.5% as Egypt, Saudi Arabia, Bahrain and the United Arab Emirates effectively create a land and air blockade of Qatar, Market Plus informed.

While the diplomatic spat hasn’t affected shipments, it raises the prospect of supply disruptions from the Middle East, including Organization of Petroleum Exporting Countries (OPEC)’s members, Saudi Arabia, Iran and Qatar. The nations all use the Strait of Hormuz, via which the U.S. Department of Energy estimates about 30% of seaborne oil trade passes. Crude had slipped below $50 a barrel amid concern that an extension of OPEC’s cuts won’t be enough to shrink global inventories as U.S. output expands, Bloomberg stated.

“On the face of it, it could present a risk, but I don’t think there is too much in the Qatar situation,” said Daniel Hynes, an analyst in Sydney at Australia & New Zealand Banking Group Ltd. “Geopolitical risks haven’t really been that influential in recent times and I don’t think that will change too much”, he added.

Dr. Mahinaz El-Baz 318 Posts

Mahinaz El Baz received her PhD degree in International Economics from Helwan University in 2022. She has +10 years of experience in journalism and economic analysis. She received the "Best Economic Article Award" in 2016 from CFA Society Egypt.


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