U.S. Missile Strikes On Syria Are Unlikely To Affect Oil Prices

World energy markets have already built geopolitical tensions into current oil prices.

By Alexandra HartApril 16, 2018 1:45 pm,

Early Saturday morning, the U.S., along with the U.K. and France, launched missile strikes  targeted AT Syria. The three nations struck in retaliation for Syrian leader Bashar al Assad’s suspected use of chemical weapons on civilians. In an energy market already feeling the effects of geopolitical tension elsewhere in the world, what effects on energy prices are likely to result from the missile strikes?

“What we’ve seen is a classic case of ‘buy the rumor sell the fact,’” says Matt Smith, director of commodity research at ClipperData.

Last week following reports of Assad using chemical weapons against his own people, energy markets bid up the price of oil. Expectations that the U.S. would strike Syria forced the price of oil higher. On Monday, prices are slightly lower. Unless Russian leader Vladimir Putin retaliates, which Smith says is unlikely at this point, he doesn’t expect prices to move up again.  

Smith says saber rattling, such as Putin’s statements Monday threatening a response, would push the price of oil higher if Syria were actually producing oil. The oil markets have already absorbed geopolitical tensions from Latin American – in Venezuela and Colombia – as well as from Nigeria and Libya, according to Smith.

Producers, including shale extracters in Texas, benefit from higher prices, according to Smith.  

Smith also says that last week’s oil price increase, combined with U.S. refineries switching to summer fuel blends, will tend to push gasoline prices higher across Texas.


Written by Christopher De Los Santos.