How the oil and gas war affects the Middle East

Oil prices have fluctuated considerable since 2008 (Photo: by Shutterstock).

In the global oil and gas war, the Middle East is caught between geopolitics and economics, writes Ahmad Abdel -Rahman.

Today, major oil and gas producers are facing difficulty in determining and stabilising oil and gas prices globally. This is in addition to the noticeable shortage of supplies to Europe due to the Russian-Ukrainian war and the Russian-European dispute. This has led to a significant increase in the price of a barrel of Brent crude, which has now reached about USD140. This rise has not been witnessed in the world since 2008, when the price of a barrel of oil reached about USD 143 due to the global financial crisis that began in August 2007 and ended in 2008. The seriousness of this crisis is that it has emanated from the American economy, which is considered to be a leading engine of the global economy.

Oil prices witnessed a significant and noticeable fluctuation from 2008 to the present day, during which the price of a barrel of Brent crude fell from USD143 to USD 40 in 2009. In 2013, prices witnessed a rise until the price of a barrel reached USD 110, then fell in 2014 to USD 57 due to the increase in US oil production. with oil prices continuing to decline in 2015 and 2016. During this period, the price of a barrel of oil was about USD 37 in 2015 and USD 27 in 2016.

With the launch of the agreement between OPEC and some oil-producing countries who are not part of this organisation, known as the OPEC-PLUS agreement, the price of a barrel of Brent rose in 2017, mainly because of a dispute between Saudi Arabia and Russia, reaching USD 45 and then USD 86 in 2018. Then the barrel price fell back in 2019 after the dispute between the two countries was settled, dropping to USD 68. The price of a barrel of oil recorded its lowest levels in 2020 due to the Corona epidemic and large stockpiles. The price of a barrel reached only USD 9, but it rose again in 2022 due to the Russian-Ukrainian war, a barrel reaching about USD 111.

In 2015, Russia and Germany announced the start of construction of the 1,230-kilometre Nord Stream 2 gas pipeline. However, this project faced great opposition from the US and its ally Britain, along with a large number of EU countries. There were fears that if Russia expands regionally it would also strengthen its influence in Europe. However, after the US imposed sanctions on the company responsible for the pipeline's construction. Germany did not complete Nord Stream 2. Russia has also recognised two separatist regions in Ukraine as part of Russia,, which has led to America and Europe siding with Ukraine.

After the Russian invasion of Ukraine on February 24, tensions increased between Russia and the US and other NATO countries. They also began to search for an alternative source of gas supply to Europe, including obtaining gas from Qatar and Australia. However, this task has been difficult for European countries, since they source 40% of their gas needs from Russia.This is in addition to Nord Stream 1 that goes directly to Germany, the largest consumer of Russian gas. . gets about 1/3 of its supplies from Russia.

Lebanon battles for its rights

At the same time, a battle is raging between Lebanon and Israel, which is trying to steal an area of Lebanon's maritime borders, which is Lebanon's right in accordance with the UN Convention on the Law of the Sea.

This is in addition to Israel's attempt to stop Lebanon accessing oil for as long as possible. Lebanon wants to secure export markets for its oil products and accessing oil could stabilize relations with its neighbouring countries, with which it participated in the establishment of the East Mediterranean Gas Forum (EMGF)

Meanwhile, tension continues between Turkey and Greek Cyprus over drilling operations. Turkey has also affirmed the Turkish Cypriots' right to the island's natural resources and has said that the Greek Cypriot's failure to compromise would obstruct finding a comprehensive solution to the divided island's crisis.

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Saturday, 28 May 2022