Crude oil prices increased on the New York and London markets this week as rising tensions between Turkey and Syria heightened concerns about possible supply disruptions.
Geopolitical risk is reflected more in the Brent price, whose premium over West Texas Intermediate is close to reaching a 1-year high. Currently, the front-month WTI-Brent spread is at $23/bbl.
Apart from the ongoing tensions over Iran’s nuclear program, the threat of a spillover of the Syrian civil war into other countries in that region is now raising concerns. The market’s attention at present is captured by the escalating conflict between Syria and Turkey.
There are concerns about a possible disruption of the Kirkuk-Ceyhan pipeline, which transports oil from Iraq.