Oil price surge attributed to market speculation, not conflict, say experts

The rise in oil prices is due to speculation of instability in the market and not the war in Israel.

This is the view of experts during a seminar hosted by the Human Sciences Research Council’s Africa Institute of South Africa to discuss SA’s stance in the war and how it affected South Africa.

Political analyst Piet Croucamp said South Africa was affected by the rise in oil prices due to the speculation of instability in the market.

“If there is any form of instability in the Middle East, it will have an impact on the oil price,” he said.

Price decreased nicely

Croucamp said there was always someone in the industry taking out futures and speculators who rely heavily on any form of instability against oil and currencies.

“They will use any form of instability to make a profit. What has had a bigger impact on the price recently was the decline in the demand in America,” he said.

Croucamp said the price decreased nicely.

“If the price peaked around $100 per barrel, the threat of what is happening in the Middle East is considerable. Around $93 is more speculation that enters the market,” he said.

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Croucamp said the slightest instability affected the oil prices, especially in that area.

“It was the same with the Russia and Ukraine war because Russia was such a big oil exporter,” he said.

Prof Christopher Isike, from the University of Pretoria, said Iran’s position aligns in some ways with South Africa’s position.

Isike said Iran’s position was clear and has been so since 1979 when Iran involved itself in the Israel-Palestinian conflict. Isike said Iran’s support for the Palestinian group was partly driven by its ideological opposition to Israel and also strategic in terms of what Iran wants to see in the region as a player.

“We can see the war between Hamas-Israeli, we can see it spreading,” he said.

No connection between conflict and SA’s history

Mapungubwe Institute’s senior researcher Na’eem Jeenah disagreed with the connection between Israel and Palestine conflict concerning South Africa’s history.

“We did not during our struggle talk about a black/white struggle or conflict. We did not talk about a South Africa versus South Africa conflict. We spoke about apartheid and the anti-apartheid struggle,” said Jeenah.

“The reasons for that were clear, apartheid was illegal under international law and the struggle against it was justified.”

Jeenah said that besides the arguments about Israel’s occupation being illegal, there were also claims of colonisation and apartheid practices by Israel.

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