Oil markets shrug off overthrow of Syrian ruler

London: Oil markets have shown little reaction to the collapse of the Syrian regime of Bashar Assad, as traders most likely calculated that Syria was only a modest producer and that events there did not immediately threaten exports from the wider region.

In trading Monday, Brent crude oil, the international benchmark, rose about 1%, to $71.80 a barrel.

Syria has modest oil reserves, and President-elect Donald Trump said during his first presidency that they should be secured, but markets were largely shrugging off the risk that conflict in the Middle East could lead to disruption of supplies. There are about 900 US troops in Syria.

In more than a year since Hamas-led militants stormed into Israel from the Gaza Strip, there has been little interruption to flows of oil and natural gas, beyond rerouting tanker traffic to avoid attacks by Houthi fighters in Yemen.

The markets have instead focused on the tepid growth of global demand that can probably be met by new supplies from the United States, Brazil, Canada and other producers not bound by the agreements of the OPEC+ cartel.

On Thursday, OPEC+ pushed back plans to increase output to at least the second quarter of next year, the third delay in recent months.

Richard Bronze, head of geopolitics at Energy Aspects, a research firm, said, "There's still a residual view that the oil market will be oversupplied next year." He added that traders were worried that Trump's policies would push oil prices lower "whether due to higher U.S. production or tariffs disrupting economic activity."

Bronze said he thought that those theories would prove incorrect, but "the market will have to see it to believe it."

Syria is in the neighborhood of large oil producers such as Iraq and Saudi Arabia, but its own production has been sharply curtailed by a decade of civil war.

In 2023, Syria produced 40,000 barrels of oil a day -- a trickle relative to major oil producers, according to the Statistical Review of World Energy, published by the Energy Institute, a London-based nonprofit.

In the early 2000s, Syria pumped more than 600,000 barrels a day, comparable to midsize producers like Azerbaijan or Egypt. That performance gives hope that with a stable political environment and improved management, oil sales could be an important source of revenue for a future Syrian government.