From City A.M:
A senior analyst at Nomura has said that a US-led military strike on Syria will have little to no disruption effect on global oil supply. Alastair Newton, senior political analyst at Nomura, said:
We cannot emphasize too strongly that, whatever option may be adopted we see little or no direct threat to global oil supply emanating from a US strike against the Syrian regime.He drew a comparison with the movement of Brent crude oil prices in Egypt after the deposition of president Mohamed Morsi, which dropped to the lower end of the $105 to $120 per barrel range in the aftermath of the coup. This was due to “misplaced, we believe, concerns over the security of the Suez Canal”.
We therefore see sentiment, ie, perceived geopolitical risk, rather than reality (with all due respect to Henry Kissinger’s famous quote, ie, “Perception is reality”) as the primary driver of the 15% or so increase in the price of Brent over the past two months…. We therefore see recent price action around Brent in particular as an overreaction to the prospect and therefore expect the price to dip again after a strike (if not, perhaps, even before any military action relative to yesterday’s high)....MORE