The rising tensions in the Middle East, especially with the recent attacks on Saudi Arabia's oil infrastructure, have once again put pressure on the global oil market and driven prices upward. Saudi Arabia has recently announced that several shipments of crude oil to European refineries have either been canceled or delayed, leading to increased concerns in the market.
Causing Factors of Tension and Their Impact on the Global Oil Market
The recent attacks on Saudi Arabia's East-West pipeline, which Saudi officials claim were the result of drone attacks from Iraq, indicate an escalation of tensions in the region. While Saudi Arabia hopes to restore half of the capacity of this pipeline to normal within a few days, a full return to capacity may take up to six weeks. This situation, along with the control of the Al-Mokha port in Yemen by Houthi forces, which allows them to carry out attacks in the Red Sea, has significantly impacted the oil market.
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Economic Consequences for Developing Countries
The rise in oil prices quickly affects fuel prices in developing countries. In the United States, the price of diesel has reached its highest level, exceeding $6 per gallon. This price increase is influenced not only by tensions in the Middle East but also due to the war in Europe and attacks on Russia's energy infrastructure. Developing countries, especially those heavily reliant on diesel, will face more serious challenges. For instance, India, the third-largest oil importer in the world, consumes more diesel than gasoline, which could put additional pressure on its economy.
Moreover, the increase in fuel prices directly impacts agricultural product prices and may lead to a decrease in food production in the coming years. Given that countries like Malaysia are heavily dependent on fuel imports from the Middle East, this crisis could have widespread consequences for the food and economic security of these countries.
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