“UAE risk” creeps into Japan due to Israel-Hamas conflict, oil imports are in danger. Gasoline could soar if Houthi attack or second “Arab Spring” occurs | JBpress

If Houthi attacks or a second Arab Spring occur, gasoline will skyrocket

• Crude oil prices are at their lowest in about four months. This comes amid concerns that global oil demand will stagnate due to lackluster economic indicators from the United States and China.
• However, the confusion surrounding the Israel-Hamas conflict is a major problem for Japan, which relies on Middle Eastern crude oil for much of its energy. In particular, we are concerned about the increasing risks surrounding the UAE, which is the largest source of crude oil imports.
• There is a possibility of attacks by the pro-Iranian Houthi group or a second Arab Spring. If the supply of crude oil from the UAE is disrupted, Japan will be at a loss.

(Kazuhiko Fuji: Consulting Fellow, Research Institute of Economy, Trade and Industry)

The US WTI crude oil futures price (crude oil price) closed on November 16th at $72.9 per barrel, about 5% lower than the previous day, the lowest price in about four months. This is due to growing concerns that global oil demand will stagnate due to lackluster economic indicators from the United States and China. This is also related to the uninterrupted supply of crude oil from the Middle East, where tensions persist.

Crude oil prices, which rose to the $90/barrel level at the end of September, are finally starting to stabilize, but will the lull continue?

The author is concerned that “geopolitical risks in the Middle East region will increase in the future, potentially leading to a crisis situation for Japan.”

On November 11, an emergency joint summit meeting between the Arab League (21 countries and 1 organization) and the Organization of Islamic Cooperation (56 countries and 1 organization) was held in Riyadh, Saudi Arabia. Countries such as Algeria and Lebanon called for an oil embargo on Israel and its allies.

Speaking of oil embargoes, we recall the ones imposed on Israel and other countries by the Organization of Arab Petroleum Exporting Countries (OAPEC) in response to the outbreak of the Yom Kippur War in 1973. This triggered a four-fold increase in the price of crude oil at the time, leading to the first oil crisis in history.

At the 11th meeting, the oil embargo did not materialize because at least three countries, including the United Arab Emirates (UAE) and Bahrain, which had normalized diplomatic relations with Israel under the 2020 Abraham Accords, objected. Although a spike in crude oil prices has been avoided for the time being due to the postponement of the oil embargo, the author argues that “there is no risk that the UAE and other countries will be seen as “new enemies” by forces that are carrying out armed attacks on Israel.” “I’m concerned.”