Global oil prices saw a slight dip on Tuesday, dropping to $72 per barrel after the unexpected fall of Syrian President Bashar al-Assad.
This political shift reduced concerns over potential disruptions in the region, causing Brent crude, the global benchmark, to fall by 0.11%, reaching $72.06 per barrel.
Similarly, US West Texas Intermediate (WTI) crude prices declined by 0.20%, standing at $68.23 per barrel as of 09:50 WAT.
This drop in oil prices followed a more than 1% rise on Monday, which had been driven by initial concerns surrounding the political situation in Syria.
While Syria is not a major oil producer, its geopolitical importance due to alliances with Russia and Iran, as well as its strategic location, made it a key factor in the global oil market.
The fall of al-Assad, which ended his 14-year rule on December 8 after rebel forces took control of Damascus, is seen as a critical development.
The rebels have already begun the process of establishing a new government and reviving vital sectors, including banking and oil production, which resumed operations on Tuesday.
Despite the political upheaval in Syria, the drop in oil prices was somewhat mitigated by positive global economic signals.
Market participants are optimistic that the US Federal Reserve might reduce interest rates by 25 basis points in its upcoming meeting from December 17–18, potentially increasing oil demand in the world’s largest economy.
However, traders remain cautious, awaiting inflation data this week, which could impact the Fed’s decision.
Additionally, market optimism surrounding China’s economic recovery helped stabilize oil prices.
Reports suggest China plans to implement a “loose” monetary policy in 2024, its first easing in 14 years, aimed at stimulating growth in the world’s largest oil-importing country.
In related news, the Organisation of Petroleum Exporting Countries (OPEC) confirmed that Nigeria’s oil production quota will remain at 1.5 million barrels per day (bpd) until 2026.
