Oil rates increase as Middle East tensions escalate after overthrow of Syrian President

(MENAFN) Oil prices rose on Monday as tensions in the Middle East heightened following the overthrow of Syrian President Bashar al-Assad by rebels, which outweighed concerns about weak demand in China. Saudi Arabia’s state-owned oil company, Aramco, had announced on Sunday that it would reduce its January 2025 selling prices to Asian buyers, marking the lowest prices since early 2021, as markets continue to be impacted by sluggish demand from China, the world’s largest crude importer.

Brent crude futures rose by 22 cents, or 0.3 percent, to USD71.34 a barrel by 01:40 GMT, while West Texas Intermediate (WTI) crude futures also increased by 22 cents, or 0.3 percent, reaching USD67.42 a barrel. Despite these gains, both Brent crude and WTI crude had seen declines the previous week, with Brent losing more than 2.5 percent and WTI falling 1.2 percent.

Tomomichi Akota, senior economist at Mitsubishi UFJ Research & Consulting, stated that the political developments in Syria have added a layer of uncertainty in the Middle East, providing some support to the oil market. He also pointed out that Saudi Arabia's price cuts and OPEC+’s decision to extend production cuts highlighted the ongoing weak demand from China, suggesting that the market could weaken by the end of the year.

In a key move on Thursday, the OPEC+ group, which includes the Organization of the Petroleum Exporting Countries (OPEC) and independent producers such as Russia, decided to postpone the increase in oil production by three months until April and extend the complete cancellation of production cuts for an additional year, lasting until the end of 2026.

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