Middle East conflict’s impact on energy market to subside soon: Experts

Israeli airstrikes on northern Gaza [Photo by EPA / Yonhap]

Amid the changing dynamics in the Middle East following the Israel-Hamas conflict, experts believe that the geopolitical repercussions could strengthen Russia’s and Iran’s influences, while energy prices and other aftermaths from the conflict could subside as early as the end of the year.

These analyses and insights were shared during a forum on recent dynamics in the Middle East and energy geopolitics, organized by the private think tank North-East Asia Research Foundation (NEAR Foundation) and which took place on Wednesday in central Seoul.

[Courtesy of NEAR Foundation]

“The Obama administration’s Middle Eastern foreign policy upset oil-producing countries, leading to a sense of betrayal towards the United States. Meanwhile, Europe appears to aid and support human rights and democracy in the region but is losing its foothold as it faces a Muslim refugee crisis in the continent,” Jang Ji-hyang, director of the Middle East and North Africa Center at the Asan Institute for Policy Studies, said during the forum. “In this situation, the trend of strengthening anti-American alliances, including Russia, Iran, and China, is likely to continue,” she added.

Despite ongoing tensions, there still is a possibility for such tensions to ease, as seen in the attempt by Saudi Arabia and Israel to establish diplomatic relations. “Saudi Arabia needs to implement reform policies and complete royal reforms,” according to Jang.

Regarding the market shock caused by the recent conflict, experts diagnosed that it is expected to return to the status quo soon. “Russian oil has recovered to its original price as it changes demand channels to India and China at lower prices,” Sonn Yang-hoon, a professor at Incheon National University, said, adding that “although supply chain changes are still underway, recovery has virtually come in just over a year.”