The civil war in Syria is coming at a cost to Americans, even in the absence of cruise missiles or other overt interventionism. Here it is in a chart. This is the one-month forward contract for a barrel of crude oil on the New York Mercantile Exchange. In other words, the price of oil, more or less. It’s down a bit Friday after a steep rise since the spring.
The pattern is quite clear. The price of oil is up 24 percent since April 17, from $87 a barrel to around $108. It has hovered near 18-month highs in the past few days.
The strange thing about this is Syria itself produces only a trivial amount of oil. Syria’s output has indeed plummeted as its conflict has become severe. As our colleague Steve Mufson noted the other day, its oil output is down to 50,000 barrels a day, from 350,000 barrels a day in March. But that is small potatoes against 90 million barrel-a-day world of oil output.
There are some other factors in play beyond the Syria conflict, including attacks on a key pipeline in Iraq that has reduced that country’s exports by 290,000 barrels a day, and protests at oil production facilities in Libya that slashed output there, along with disruptions on key pipelines in Nigeria.
Even then, the runup in oil prices goes beyond anything that current fundamentals could justify. Witness the swings in the past few days: Oil prices spiked earlier in the week when Western airstrikes seemed a certainty, and faded Friday after a British parliamentary vote rejected the possibility, making the outlook less certain. Clearly, oil traders aren’t just responding to this or that supply disruption, but making bets on the long-shot probabilities of an all-out conflagration that spreads to bigger oil producers elsewhere in the Middle East.
Beyond the human cost of the conflict, the question now is how much the U.S. consumer can take, in a time of federal spending cuts, a faltering in some key international markets — and now, if higher crude oil prices are sustained, higher prices at the pump.
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