Recent instability in some oil-producing regions threatens to “knock some production offline”; however, in less politically perilous zones, drillers are profiting. Political turmoil in Iraq, Syria, Ukraine, and Libya have companies like Exxon and BP already relocating workers in southern Iraq. With oil prices at their highest in nine months, companies with large investments in these areas face significant risks. Oil markets away from the violence, however, can benefit from an extra $5/barrel. Companies increased drilling in Texas — adding more rigs and investing more money. The US and other countries are taking advantage of this opportunity to increase profits, but this will likely only be a temporary spike. In the long term, “instability will hurt oil dependent economies.”
Read more on the subject of political upheaval and oil markets here.
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