Geopolitical risk has gone from the oil market in terms of any chance of a serious escalation on that front. People are now waiting to see the direction of the new US administration and any upcoming ceasefire initiatives. Post-ceasefire, we’ll need to consider the practicality of reconstruction in Gaza and Lebanon. There’s the ongoing concern that Israel may limit that given their belief that many of these areas are militarized with tunnels.
Will the current oil price alter OPEC+ plans to increase supply in December?
For those who believe in balancing the oil industry with Energy Transition goals, these lower prices could be an encouraging signal to accelerate change. For example, Saudi Arabia has indicated it will prioritize domestic investment, channeling funds internally to diversify its economy - a move that speaks to their economic vision, oil demand expectations, and price forecasts. Meanwhile, countries like Iraq, with fewer resources to invest, may find lower prices a necessary impetus to reform and improve economic spending efficiency. So, for OPEC+
countries, it may be better to acknowledge the ongoing transition rather than clinging to signs suggesting it won’t happen. The differing capabilities among countries - some able to invest heavily, others not -only highlight the urgency for action.
US election result impact on the Mideast region?
There’s an interesting dynamic among Arab-American voters, with some supporting Trump, citing his promise of peace in the region. Meanwhile, Democrats face challenges, especially regarding their stance on Gaza and Lebanon. In the Middle East, opinions are similarly split. For Iran, a Trump administration would be undesirable. During his previous term, the US withdrew from the JCPOA, imposed further sanctions, and significantly impacted Iran’s military and proxies in Lebanon, Gaza, and beyond. For Iran, a Harris win would likely be preferable, as the current administration has shown a level of protection for Iran against Israel, for various reasons. This division is mirrored across the region: allies of Iran support Harris, while opponents lean toward Trump.