Iraqi Prime Minister Mohammed Shia al-Sudani has expressed concern over the Israel-Hamas war, warning that it could lead to disruptions in crude oil exports from the Middle East to international markets. Speaking at a peace summit in Cairo, al-Sudani emphasized that the conflict could have far-reaching consequences, including impacts on global security, regional conflicts, energy supplies, economic crises, and the potential for further conflicts.
Al-Sudani called for an immediate ceasefire and a prisoner swap to bring an end to the violence. He also stressed the importance of not displacing civilians from Gaza, stating that the Palestinians have no other place to go but their own land. The prime minister suggested that adherence to UN Security Council resolutions against Israel’s settlement policies in Palestinian territory could have prevented the crisis, noting that Israel had previously dismantled its settlements in Gaza in 2005.
The warning from al-Sudani comes at a time when there are concerns that Middle East countries may cut off oil exports to the West in response to a potential Israeli ground offensive in Gaza. On Wednesday, Iranian Foreign Minister Hossein Amir-Abdollahian called for Muslim countries to impose an immediate and complete oil embargo on Israel, which caused a stir in energy markets. The 1973 Arab oil embargo against the US and other countries supporting Israel had a significant economic impact, with long lines at gasoline pumps. However, the US now relies less on Middle East oil, with only about 12% of its crude imports coming from the region in 2022, compared to around 85% in the 1970s.
International oil markets remain volatile, and the ongoing Israel-Hamas war has the potential to further increase prices. Fatih Birol, the executive director of the International Energy Agency, warned that this could be detrimental to inflation, particularly for developing countries heavily reliant on imported crude and oil products.
The conflict is also significant due to the backing of Hamas by Iran, the eighth-largest oil producer in the world. Without support from other major exporters for an embargo, Iran still has the capacity to disrupt markets, as approximately one-third of the world’s seaborne oil shipments pass through the Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman and the Arabian Sea.
In conclusion, Prime Minister al-Sudani’s warning highlights the potential consequences of the Israel-Hamas war on global energy supplies and the economy. The escalation of the conflict and involvement of other regional countries could lead to disruptions in crude oil exports from the Middle East. The ongoing volatility in international oil markets and the call for an oil embargo by Iran further intensify concerns and underline the potential impact on inflation and developing countries heavily reliant on imported crude and oil products.