subject: Where Would Crude End Up Amidst Middle East and Japanese Crises? [print this page] Where Would Crude End Up Amidst Middle East and Japanese Crises?
If what was happening in Middle East not enough to adversely impact crude oil prices, Japan also was pulled into crises due to the Tsunami and Earth quake which stuck at its coasts. The situation in Japan would not have been this worse if the nuclear reactors were not damaged by this natural calamity. The political crises in Middle East Clubbed with Natural disaster stricken Japan (which is world's third largest economy) has led to emergence of a very fluid situation with relation to crude oil prices. As it is crude oil prices were rising rapidly over the past few months, attributed to worsening of political situation in Middle East, and now experts are wondering what impact will the Japanese disaster create in International Energy Markets.
Middle East Drama Continues
The civil unrest in Middle East continues with more countries joining in and pressing their demand to topple their head of states. Situation in Egypt, Libya, Bahrain and Yemen has worsened, affecting oil supplies from these states. The revolt against their current leaders is catching up fast in some other countries in this part of the globe which accounts for more than 50 percent of world's crude production. The uncertainty hovering over political stability in this region will continue to drive up the crude prices in near future.
Immediate Impact of Japanese Disaster
Along with Japan the entire world community was shocked by the magnitude of disaster which struck world's third biggest economy. As we all saw on our television screens the news of blasts occurring in many nuclear reactors which resulted in radiation leaks, caused panic among the business community as a whole. For those whose stakes in Japanese markets were high there was an immediate set back as their stock markets plunged down. Overall business sentiment was very low as a result of which crude prices also fell down.
Impact of Japanese Disaster in near future
As the world tries to come out of grief of Japanese disaster they realize that current situation in Japan would lead to increase in their demand for crude. As number of nuclear reactors in Japan have been damaged or have been shut down the resulted energy deficiency will be required to be met by alternative means which would mean their requirement for crude is bound to go higher. This scenario would again push the oil prices upwards.
Where could it all end up?
Though things are still unwinding, both in Middle East and Japan, the future for crude prices look bullish. There is very little doubt that Japan will need to secure alternative sources of energy if it wants to limit the impact of power deficit. This will only push the crude prices upwards. Now with respect to situation in Middle East, if the things get worse there, we could witness an exponential rise in oil prices. Both factors clubbed together the crude prices are bound to remain high whereas the extent of crises in Middle East and Japan would decided the multiple in which these prices rise further.
