Global oil prices experienced a slight decline, dropping to $72 per barrel on Tuesday, following the dramatic overthrow of Syrian President Bashar al-Assad.
The political turn eased concerns about potential disruptions in the region, prompting Brent crude, the global oil benchmark to fall by 0.11% to $72.06 per barrel.
Similarly, the US West Texas Intermediate (WTI) crude price dropped 0.20% to $68.23 per barrel as of 09:50 WAT.
The drop in prices followed a more than 1% rise on Monday, reflecting initial uncertainty about the situation in Syria.
These drops indicate that although Syria is not a major oil producer, its strategic location and alliances with Russia and Iran contribute to its significance in the global oil market.
LEADERSHIP recalls that the 14-year rule of Assad ended on Sunday December 8 after rebel groups overran Damascus.
The rebels have since started forming a government and restoring key sectors, including banking and oil production, which resumed operations on Tuesday.
Despite the political development in Syria, oil market declines were capped by positive global economic indicators. “The market is focused on the possibility of a rate cut by the US Federal Reserve next week, which could bolster oil demand in the world’s biggest economy,” Reuters reported.
The Federal Reserve is expected to reduce interest rates by 25 basis points during its December 17–18 meeting.
However, traders remain cautious, waiting for inflation data due this week that could influence the Central Bank’s decision.
Meanwhile, optimism about China’s economic prospects also provided support for oil prices.
Reports suggested that China would adopt an “appropriately loose” monetary policy in 2024, its first easing in 14 years aimed at spurring growth in the world’s top oil-importing country.
In a related development, the Organisation of Petroleum Exporting Countries (OPEC) recently extended Nigeria’s oil production quota of 1.5 million barrels per day (bpd) until 2026.