Saudis Seek to Increase Oil Prices 'By Fuelling Conflicts in Middle East'

Oil prices did not significantly rise on Monday despite the Saudis' expectations related to the new tensions in the Middle East. One of the reasons for low oil prices is global oil overproduction, German newspaper Deutsche Wirtschafts Nachrichten reported.

The negative trend could urge Saudi Arabia or other petroleum producers to further escalate the situation in the Middle East. The first signs can already be seen in Libya, Yemen and in the rapidly deteriorating relations between Saudi Arabia and Iran.

On Monday, the oil market witnessed a significant price fluctuation. Saudis expected that the tensions in the Middle East would lead to supply shortages and to the following rise of oil prices, but miscalculated the situation.

Because of worldwide overproduction, the price for crude oil has fallen over the past year and a half by about two-thirds compared to 2014. According to the newspaper, the global oversupply of crude oil is one of the main reasons for the decreasing oil prices.

DWN argued that low oil prices may put Saudi Arabia on the brink of national bankruptcy. If the situation does not change, the Saudi system would face a serious threat.

In this case, the only chance for the Saudis would be the escalation of the situation in the Middle East. For instance, the Saudis may escalate the fighting in Yemen between Saudis and Houthis who are supported by Iran.

At the same time, the newspaper argued, Tehran is in a relatively favorable position. Because of the lifting of sanctions, Iran will reenter the oil business and contribute to further decrease in prices.

The escalation of the situation in the Middle East will not only affect the whole region, but also have a negative impact on European countries. The armed clashes will lead to the increased outflow of refugees and worsen the migration crisis in Europe, DWN concluded.