Wars, conflicts and the effect on oil prices

The recent conflicts in Gaza paired with the ongoing Russian war on the Ukraine, have raised eyebrows on whether geopolitical tensions are directly linked to global price fluctuations in oil.

“The price of oil is very sentimental and related to the world’s headlines,” business and financial analyst Tariq Al-Rifai said.

“However, overall, the effects seem to be very short-term.

“Once Russia invaded Ukraine, there was a spike in the price of oil for 4-6 months, but then things declined after a while.

“The same thing applies to Gaza, it lasted for about two weeks – and the price of oil is now lower than it was before the conflict.”

In terms of Australia’s local market, Mr Al-Rifai believes these events have not had much of a short-term effect – in fact, “minimal – if any effect at all”.

The war between Israel and Hamas has been ongoing since October 7. So far, the death toll of Palestinians killed by Israeli airstrikes is still on the rise, with more than 20,000, including children, reported deceased so far.

“There are effects not only on Israel’s economy but also on the region,” Mr Al-Rifai said.

“Countries like Egypt and Turkey’s tourism are directly affected by this, the longer the conflict drags on, the more damage we will see.”

Mr Al-Rifai raised concern about other issues happening around the world – adding to the list of investor fears – including geopolitical conflicts and wars.

They affect the overall health of an economy and render investors less reluctant to spend their savings.