Conflicts in the Middle East have always influenced oil prices. The current crisis in the region is no exception, and the increase in the price of a barrel of crude oil has a positive impact on the Venezuelan economy.

Expert opinions indicate that conflicts in the Middle East generate an upward trend in oil prices, benefiting producing countries. In the case of Venezuela, the Merey blend could be one of the beneficiaries of the international crisis.

It is well known that armed conflicts usually lead to an increase in oil demand, which would positively impact national exports.

The market reaction to the conflict between Iran and Israel is expected to be the same as in other similar situations, with the price of a barrel of crude oil skyrocketing.

M.Pino

With information from national and international media and agencies

(Reference image source: Delfino Barboza on Unsplash)

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The world economy depends largely on oil as a strategic energy and economic resource. According to the top ten countries with the largest reserves from the United States Central Intelligence Agency (CIA), Venezuela leads the list, with 303.8 billion barrels.

This places the South American nation in a privileged place thanks to its energy potential. The positions on the Agency’s list are distributed as follows:

1. Venezuela: 303.8 billion barrels.
2. Saudi Arabia: 258.6 billion barrels.
3. Iran: 208.6 billion barrels.
4. Canada: 170.3 billion barrels.
5. Iraq: 145.5 billion barrels.
6. Kuwait: 101.5 billion barrels.
7. United Arab Emirates: 97.8 billion barrels.
8. Russia: 80 billion barrels.
9. Libya: 48.3 billion barrels.
10. United States: 47.1 billion barrels.

Reasons that make oil a valuable resource

For most countries, crude oil is a determining economic resource because it generates high income through the export of not only oil itself but also derivatives for various sectors of the global industry.

On the other hand, and connected to the above, “oil is the main source of energy in many parts of the world.” It is used in processes to “generate electricity, power transportation vehicles, heat homes and as a raw material in the manufacture of petroleum products, such as gasoline, diesel and kerosene.”

Industrial development is another of the strategic points that oil involves, since it is used in the manufacturing of chemical and plastic products.

It is also worth mentioning the geopolitical influence that countries with the largest oil reserves can have in the international context, favoring the signing of trade agreements and alliances or political negotiations, as well as investment in “social programs, infrastructure and public services.”

M.Pino

Source: Portafolio.co

(Reference image source: Unsplash+, in collaboration with Getty Images)

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