However, although oil prices have been dramatically and consistently lower in recent weeks and months, worsening disagreement and mistrust between Iran and Saudi Arabia has seen oil prices rising somewhat, and may bring about continued uncertainty if things don’t return to some kind of balance.

What’s Going on in the Middle East?

Although oil prices remain low across the developed world – February forecasts are calling for a price of around $37 per barrel – prices rose by as much as 4 percent across Europe this past week. We have Middle East tensions to thank for it.

According to Richard Mallinson, an analyst for Energy Aspects: “What is coming back to the surface is how deeply divided and complex the Middle East is at present.”

Whereas OPEC nations have historically been able to put their differences aside long enough to reach an accord on matters concerning oil prices and supply levels, unrest and mutual distrust have fractured this already tenuous alliance. This is particularly true of Saudi Arabia and its neighbors: Political strife between these nations has sidelined economic cooperation and has created an effective vacuum of central leadership and consensus.

As a result, OPEC nations are now competing against each other for customer loyalty the same way China and India do, by manipulating prices in a race to the bottom. Simply put, oil prices are historically low because OPEC countries no longer cooperate with each other – instead, they are competing.

In other words, it sounds startlingly like the spirit of capitalism has come, perhaps temporarily, to the Middle East.

The Heart of the Conflict

Iran, with Venezuela in tow, has recently been calling for a cut in oil production: a course of action that would almost certainly see oil prices rise once again. This recommendation has largely been ignored by Saudi Arabia, Kuwait, and the United Arab Emirates. At a December meeting, OPEC leadership failed to reach a consensus on anything of substance, let alone production targets.

Of course, while tensions between Saudis and Iranians are arguably at the heart of this, a great many other factors are in play as well. For example, as part of a bipartisan spending agreement reached late last year, the U.S. has lifted its ban on crude oil exports for the first time in 40 years. As a result, analysts are saying that the U.S. could bulk up the world’s supply of oil even further, which could help keep things stable if there’s a global shortage or if OPEC cuts output.

In other words, we are uniquely positioned to reduce our dependence on Middle East oil and are better equipped to weather further destabilization of the region.

Another of the myriad factors in play is weather and climate. We are seeing unseasonably warm weather across much of the world, which has further depressed the price of natural gas and oil. Whether you blame long-term effects like climate change or short-term outliers like El Niño, the result is the same: cheap oil for everybody.

Unfortunately, the same prognosticators calling for continued low prices for oil also worry that tensions between Iran and Saudi Arabia could fuel unrest in other parts of the region, like the violence in Yemen and the Syrian civil war.

What This Means for Investors

Back in the United States, this continued tension among the world’s oil-producing nations has meant a rise in the sales of large vehicles. There has also been a fall in stock prices for alternative energies, the most promising of which remains solar power. It’s plain to see that both of these outcomes betray American consumers and investors as somewhat shortsighted.

A good play in the long game is investing in oil while prices are low, while still profiting from short-term disruptions by making longer-term investments in alternative energies. No matter which horse you want to bet on, it simply doesn’t make much sense to wait until OPEC gets its act together and the price of oil climbs back to where it was.

The opinions, beliefs, and viewpoints expressed by the authors are theirs alone and don’t reflect any official position of Geopoliticalmonitor.com.

The post Oil Price Fallout from Saudi-Iran Tensions appeared first on Geopolitical Monitor.

After the latest high-profile outburst of violence, this time in Paris, the world is experiencing similar shockwaves of cause-and-effect, though only time will tell how long-lived these effects will be.

The Global Economy

The first and most measurable impact of the Paris attacks is purely economic. It says a lot about the times we’re living in that stocks in airlines, cruise lines, and booking sites began reeling immediately after the events in Paris.

Major airlines, along with websites specializing in airfare, such as Expedia, were among the S&P’s worst performers on the first Monday after the attacks. In addition, growth in the euro zone crawled to a paltry 0.3% in the third quarter of 2015, which was well below analysts’ estimates.

Nevertheless, sharp changes in stock prices and currency values are usually a short-lived consequence of terrorist attacks. The longer-term impacts may be felt for quite some time, and they could manifest into longer-lived downturns in travel and immigration thanks to tighter borders across the world, longer waits at security checkpoints, and the general sense of shared fear and panic that accompanies any high-profile violent act.

Not Just about People

So let’s move past stock prices and focus for a moment on something fundamental to the efficient functioning of modern civilization — the travel not of citizens, but of trade goods between international borders.

The news there, at least so far, has been less than encouraging. Heightened security all across the globe, and particularly in Europe, has caused severe bottlenecks for goods traveling across pan-European trade routes. This has created an even worse-than-usual slowing of manufacturing output, which had already been reduced to a crawl in recent years. It’s not enough to cause meaningful shortages of essential products, but economists are taking note.

The State Department Responds

Back on US soil, the State Department was quick to address rising public fears surrounding international travel, providing a worldwide alert for US citizens warning of “risks of travel due to increased terrorist threats.” It’s a standing warning set to expire early next year on February 24^th. Potential sources of danger called out in the message include theaters, sporting arenas, aviation facilities, open-air markets, and other entertainment and commerce venues.

But if that sounds like a pretty standard warning to you these days, you’re not alone. So to better understand the real-world risks following a known terrorist attack, the Washington Post reached out to Michelle Bernier-Toth, the managing director for the State Department’s Bureau of Consular Affairs.

Interestingly, she reported that most of the calls her department received were from American citizens letting them know they were safe. The more important course of action, though, according to Toth, is to call home first to let friends and loved ones know you’re out of harm’s way.

But in the course of the interview, Toth also highlighted a particularly telling sign of the times — something called the Smart Traveler Enrollment Program (STEP), which sends out messages to travelers concerning threats and ongoing attacks.

This program isn’t new since Paris. Rather, it’s a symptom of the widespread culture of fear that’s managed to permeate society on a global level. In other words, it’s a service that didn’t exist just a few short years ago, and it’s one most people likely couldn’t have imagined would one day even be necessary.

A Muted Response

Even with all of the fear surrounding international travel and with experts and laypeople alike circulating their dos and don’ts about whether to travel or stay put, a remarkable thing is happening. Although September 11^th represented probably the most significant downturn for the travel industry, subsequent acts of violence have elicited a much more muted response.

Demand for hotel rooms abroad, for example, dipped only slightly following this recent attack.

So the question before us is this: Are we becoming less fearful generally, or have we simply become desensitized in a world where shocking acts of violence are, if not more common, at least better televised? If the purpose of terrorism is to instill fear in a complacent world, then that same world seems to have responded with an attitude that says, “Carry on with business as usual, or the terrorists win.”

That kind of solidarity and willfulness is admirable, and it appears to demonstrate a general trend toward the acceptance of the fact that risk exists everywhere we look. We take our lives into our hands every time we slide behind the wheel of a car, for example.

Hope from Chaos

And yet, there’s one final aspect of international travel that will be feeling the consequences of Paris for a long time to come: the travel of refugees. Even if the average person seems to have made their peace with booking a spot at a Sandals resort or boarding a Delta flight, Americans — and the leaders they’ve chosen for themselves — are now looking at political and economic refugees with the kind of mistrust we haven’t seen for a generation.

Why? One of the attackers complicit in the Paris attacks, Ahmad Al Mohammad, purportedly arrived in France after posing as a Syrian refugee in Greece.

In any event, it’s clear that moving between international borders is an act that’s fraught with controversy, complications, fear, and mistrust — and yet, an unlikely ray of hope. At a time when it’s never been more important to come together as a species, even across lines drawn on a map, travel should be the one thing that gets easier — not harder.

The opinions, beliefs, and viewpoints expressed by the authors are theirs alone and don’t reflect any official position of Geopoliticalmonitor.com.

The post International Travelers Brushing Off the Paris Attacks appeared first on Geopolitical Monitor.