Oil prices were on the rise for weeks when tensions were high after the Syrian government’s alleged use of chemical weapons.
However, when diplomacy helped the US avert a missile strike on the Middle Eastern nation, prices came tumbling back down.
In late August, crude oil shipped from Texas rose to its highest level in nearly a year at US$109.06 per barrel, while Tapid crude jumped even higher to US$123.85 per barrel. In some areas, oil prices rose to their highest in several years.
However, these highs were short-lived as the markets quickly found stable ground when it appeared unlikely that the US would lead an attack.
On Tuesday, President Barack Obama announced he hoped it wouldn’t be necessary for the country to flex its muscles and deliver what he called a “limited” missile attack on Syria. At the same time, Congress announced it was hoping to work with the UN to build diplomacy and gather more facts before any military action was taken.
Further adding to the cooling oil prices, Syria accepted terms proposed by Russia to give up its cache of chemical weapons. Russia asserted it was crucial for Syria to give up its chemical weapons to international organisations, after which Syria agreed.
This was met by falling benchmark oil futures, which dropped more than 2 per cent to their lowest in a week
“Just as the drums of yet another war in the Middle East were beating louder, a diplomatic solution seems to have emerged,” INTL FCStone analyst Edward Meir told The Wall Street Journal.
With prices settling, people with oil and gas training and resources companies may be able to better plan for the near future, as a conflict in Syria appears increasingly unlikely.