War may push oil to $200 per barrel in Kuwait

Dr. Sadem Al-Bassam, an economic and oil expert and head of the accounting department at Kuwait University, speculates that the price of a barrel of oil will reach more than $200 if the war between Israel and Iran continues and expands, especially since this war will involve international parties. He indicated that the price of the oil commodity is always exposed to a rise in times of political crises in particular. Dr. Al-Bassam stressed that the focus of the conflict this time is in the heart of the Middle East, which includes major international waterways through which oil supplies pass, especially since the Gulf countries are the largest oil producers in the world. He explained that changing the route of Gulf oil tankers from the Red Sea to the Cape of Good Hope to avoid a political crisis in the sea route inevitably leads to two factors that will increase the price of a barrel of oil. The first is the scarcity of oil and the second is the delay in obtaining it. This is because ships taking the Cape of Good Hope route take a long time to cross from the Red Sea.

Also, the cost of transportation will increase when the alternative direction is towards the Cape of Good Hope. This will strongly affect the price of a barrel of oil. This matter requires the state to expand in non-oil industries because oil supplies may stop during times of war. Dr. Al-Bassam called for reducing the dependence on others in providing the country’s necessary needs, especially about food security, which has become an urgent necessity in the difficult, harsh and dangerous circumstances sweeping the world in light of the continued exposure of waterways to danger and closure to free navigation, which has led to increase in the prices of transporting goods and commodities to huge amounts.

He explained that the solution to this food dilemma is to intensify efforts to provide long-term food security that does not depend on short-term periods, as is the case now. This necessitates the need to change the state’s mechanisms in the way it distributes agricultural plots and livestock pens so that they are not places to spend holidays and have fun. The condition must be implemented that it be distributed to contribute to supporting internal food security so that the country does not suffer again from a scarcity of food products, like the way it happened during the COVID-19 pandemic period when some major crops such as onions, tomatoes, and many other commodities became scarce.
Source: Arab Times