Oil prices skyrocket
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This Tuesday, the price for a barrel of #oil rose to its highest level in the past six #months . Investors partly blame the #United #States plans to stop buying oil from Iran. In #November 2018, sanctions were imposed on Iran’s oil trade, however, conditions were imposed that allowed eight countries to continue buying oil being supplied from Iran. Now, these conditions are about to expire without renewal, outlawing oil purchases from Iran. Six months ago, investors were worried about a possible oil production excess over demand. The situation has now changed, with #Iran out of the picture, there is a high risk of oil shortage, driving prices up. Saudi Arabia has announced its willingness and ability to fill the space left by Iran in terms of oil production. However, analysts fear the consequences of #Saudi #Arabia ’s economy becoming even more dependent on oil production. Nonetheless, as there is a readily available substitute to Iran, oil prices should decrease shortly. According to Bloomberg, until this happens, investors may be buying #Russian assets, as the country produces oil and gas. On the other hand, investors may be avoiding #Indian assets, as the country depends on the import of energy sources, thus prices for assets will probably be higher. With oil prices now up by 40%, prices for products may rise, thus inflation might become an issue and hinder people's spending ability.
Do you believe that oil prices will continue to rise?
Do you think that Iran and the United States will find an agreement?
#ShareYourOpinion in the comments below!