Paradox of A Political Conflict

As far as I could remember, any conflict or impending conflict in the Middle East escalates oil prices almost immediately. At present, it is totally the opposite, oil prices even dropped further. World’s dependency on Middle East oil is now in downtrend that OPEC could not dictate oil prices as they usually do.

Oil prices has always been a measure of the health of world economy. Support industries to the Oil & Gas will immediately increase prices with an oil price hike. However, at this time, support industries are still enjoying the pre-2015 oil price levels making it difficult for oil producers to execute capital expenditures due to diminishing profitability. Unless all commodity prices will fall altogether, world’s economic recovery from this falling oil prices will be longer than anybody could expect.