Middle East Conflict and Financial Markets: Lessons Learned and Future Prospects
1. Geopolitical Issues in the Middle East and the Rise in Oil Prices Instability in the Middle East is a major factor affecting international oil prices. If we look at cases such as the Arab Spring and the Gulf War, we can see that political instability in the Middle East has caused international oil prices to rise. In particular, during the Arab Spring, oil prices rose from $70 per barrel of WTI in early 2010 to more than $110 per barrel in April 2011. In addition, after the Gulf War, international oil prices continued to show an upward trend. However, over time, the influence of political and military issues in the Middle East on oil prices has gradually decreased. In other words, the relationship between "geopolitical risk" and "oil prices" is weakening. 2. Learning effect: Market reaction based on past experience The current market reaction, which is showing more moderate changes instead of sharp swings in oil prices, can be considered a "learning effect...