Low oil prices and the fight against ISIL/Da’esh

09-03-2016

The price of oil has fallen significantly since June 2014, from a peak of US$115 per barrel (bl) then to US$26 per barrel in January 2016, although it has somewhat recovered recently. This can partly be explained by weaker demand, robust supply growth and the expanding coverage of mandatory energy effciency provisions worldwide. These changes come at a time of major turmoil in parts of the Middle East. Iraq – with the world’s fifth largest oil reserves – is engaged in the fight against ISIL/Da’esh which controls some of Iraq’s oil fields. Syria – with a national budget largely dependent on oil revenues – is torn apart by civil war. Iran, on the other hand, is returning to international oil markets as a result of the gradual removal of sanctions against it, in line with the agreement on its nuclear programme.

The price of oil has fallen significantly since June 2014, from a peak of US$115 per barrel (bl) then to US$26 per barrel in January 2016, although it has somewhat recovered recently. This can partly be explained by weaker demand, robust supply growth and the expanding coverage of mandatory energy effciency provisions worldwide. These changes come at a time of major turmoil in parts of the Middle East. Iraq – with the world’s fifth largest oil reserves – is engaged in the fight against ISIL/Da’esh which controls some of Iraq’s oil fields. Syria – with a national budget largely dependent on oil revenues – is torn apart by civil war. Iran, on the other hand, is returning to international oil markets as a result of the gradual removal of sanctions against it, in line with the agreement on its nuclear programme.