Oil prices have fallen sharply over the past few months — even though the terrorist organization ISIS has taken control of some refineries in Syria and Iraq.
Prices haven’t shot up since the United States and its allies have started to conduct airstrikes against ISIS oil targets in Syria either.
It may seem strange that prices haven’t skyrocketed.
Typically, tension in the Middle East has caused serious concerns about oil supply being taken off the market.
But experts say there are several reasons why the ISIS situation has not pushed energy prices up … and that the trend should continue.
ISIS supply disruption is minimal. While ISIS has made headway in eastern Syria and northern Iraq, it has not yet been able to take control of many oil properties in the southern part of Iraq. Unless ISIS does so, there is probably little reason to worry about global supply being cut.
“There has been no visible production decrease yet. ISiS has made a push for the south of Iraq and has not succeeded. And that’s where a significant portion of the country’s oil production and infrastructure is,” said Dan Pickering, co-president of Tudor Pickering Holt & Co., an investment bank that focuses on the energy industry.