Impact of Gaza war on East Med gas [Gas in Transition]

Impact of Gaza war on East Med gas [Gas in Transition]

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Natural Gas News
Impact of Gaza war on East Med gas [Gas in Transition]

Summary

The Israel-Hamas war has brought the question of East Med energy security and the geopolitics of energy back to the fore… energy security concerns resurface frequently in a volatile region. [Gas in Transition, Volume 3, Issue 11] by: Charles Ellinas

The Israel-Hamas war overshadows most other issues around the East Med. It is a crisis but, in terms of energy, what happens is dependent on the extent and duration of the fighting, whether Hezbollah gets further involved, what Iran may or may not do, associated geopolitical tensions and the possible occurrence of terrorist attacks. With no solution in sight, there is always a risk that the conflict could develop into a regional confrontation with potentially global consequences. So far both Hezbollah and Iran have refrained from any direct involvement. But if the civilian death toll in Gaza carries on rising, the risk of wider conflagration increases. Right now, it is characterised by extreme uncertainty. In global energy terms the concern is whether it will lead to oil and gas supply disruptions. Oil prices were already high before the war, because of Saudi Arabia’s and Russia’s decision to extend oil production cuts, and went higher immediately afterwards. But they have since declined below $80/b, implying that the oil markets do not see any immediate escalation dangers. The industry’s current base-case appears to be that the conflict will likely be largely contained to Israel and Gaza. The war led to the Israeli government shutting-down...