Georgia conflict pushes up oil prices

12 August 2008

The possibility of escalation of the conflict between Georgia and Russia is pushing up oil prices, it has been suggested.

According to OilVoice, the cost of a barrel of crude rebounded from its lowest point in 14 weeks yesterday as fears that the fighting would disrupt production grew.

Georgia is not an oil producing country itself, but the fighting is thought to be disrupting exports from the region to the West.

And energy risk manager at Mitsubishi Tony Nunan told the Associated Free Press: "Investors have to realise that if the situation escalates, the shutdown in the ports could last a long time and this could start affecting supplies."

OilVoice reports that the dispute, over the territory of South Ossetia, led oil prices to jump $1.70 (89p) to $116.90 in New York yesterday.

Recently an attack on a Nigerian pipeline by militants prompted fears that supply would be significantly lowered.

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