Crude oil prices could rise as a result of the wave of anti-government protests in Iran. Any disruption in oil supply through the Persian Gulf could push up oil, which was trading around US$62-a-barrel on the Nymex futures market on Thursday.
Talking on CNBC’s Squawk Box program, Uwe Parpart, the chief strategist at Capital Link International, warned of the dangers after protests against Tehran’s economic policies continued.
“I think that it’s very clear that the Middle East is very polarized,” he said. “You have the Trump administration backing Saudi Arabia. Saudi Arabia has accused Iran of all sorts of nefarious undertakings, including [what is going on] in Yemen.
“And this will play out. We’ll have to see how it will play out, but there is no question it is not just an internal, or domestic affair. It is a broader Middle Eastern affair,” Parpart added.
In such a volatile environment, any problems in oil supply would have a serious impact on the price of crude.
“If there is going to be any kind of disruption to oil supply through the Persian Gulf, or even from Iran itself, then there will be a significant uptake in oil prices,” Parpart, who is the editor of Asia Times, said.
“And we’ll see how this affects the world economy. That is also a potentially very negative thing, especially for certain emerging market economies,” he added.