As the world looks on at the war between Israel and Palestinian group Hamas, energy markets, particularly oil, face increased volatility that could have far-reaching consequences — including potential effects on Brazil’s renewable energy projects.
State of play. The conflict has introduced new factors that put pressure on oil prices and derivatives. A number of concerns have emerged:
- The Middle East is responsible for one-fifth of the world’s oil production, making it a key player in global energy markets. With the conflict’s potential impact on political stability, the world is watching closely at nearby Iran — one of the largest oil producers — to see whether it will become involved in the war.
- Furthermore, the fight between Israel and Hamas could hinder U.S. negotiations with Saudi Arabia to increase oil production starting in December, with the aim of alleviating pressure on fuel prices in the world’s largest economy.
- Also, there are uncertainties surrounding Russia’s increasingly important role as a diesel supplier to Brazil. Russia’s decision to resume diesel exports after a temporary suspension adds another...
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