Is the recent jump in oil prices directly related to the conflict in the Middle East?
It is impossible to pinpoint exactly what causes changes in oil prices, although the explosion of hostilities is certainly a factor in the jump in prices in recent days. Any conflict in the Middle East raises concerns about oil supplies from the region. Over the weekend a military commander in Iran called for Islamic countries to cut oil supplies to countries that support Israel. While this was not taken seriously – and was dismissed outright by some sources at the Organization of Petroleum Exporting Countries – it does make some traders nervous. Are there other things that are making prices swing so radically? There are so many factors that go into energy prices that it is hard to figure which is most important. In addition to the conflict in Gaza, a dispute erupted on New Year’s Day between Russia and the Ukraine over natural gas payments, and this has disrupted supplies to Europe, pushing up prices. At the same time OPEC is in the process of instituting oil production cuts, and some
