Geopolitical tensions in the Middle East have fueled uncertainties that will impact the oil and gas industry, while the US-China trade conflict has created an unprecedented economic crisis for business, Mahathir Bin Mohamad, Prime Minister of Malaysia, said at the Asia Oil & Gas Conference 2019 on Monday.
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Mahathir said the Middle East is as turbulent as it was back in 2003 in spite of, or because of, the Western powers and their allies affecting regime changes in the region.
"Whether we acknowledge it or not, the military expeditions of 2003 used democracy as their cause when it is widely accepted that it was merely a camouflage, a pretext to take control over the production of oil in these nations," he said.
"In the Gulf, games of provocation create more uncertainties. These have definitely increased the stress on doing business and surely the oil and gas industry is and will be affected," Mahathir said.
Crude oil prices opened higher on Monday during Asian hours. At 11:25 am Singapore time (0325 GMT), ICE Brent August futures rose 26 cents/b (0.4%) from Friday's settle at $65.46/b, while the front-month NYMEX August light sweet crude futures contract was up 41 cents/b (0.71%) at $57.84/b. Oil prices rose on the back of growing concerns of a conflict between the US and Iran, after the US said it would ramp up sanctions on Tehran this week in response to an attack on a US military drone last week.
"Rising Middle East tensions have raised the risk of a price spike. And of course in the short-term, energy trade flows to Asia are obviously a concern," Jeff Brown, president of Facts Global Energy, told S&P Global Platts.
Later this week, US President Donald Trump and his Chinese counterpart Xi Jinping will meet at the G20 summit in Osaka to discuss ongoing trade differences that have weighed on market sentiment and commodity demand.
"While the turmoil of 2003 and the subsequent years remain unabated, we are now facing an unprecedented economic crisis caused by the US-China trade war," Mahathir said. "At this point in time we will not know how it will pan out but even as it is, numerous casualties have fallen along the way and we can expect more to fall if it persists," he added.
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