Middle East tensions ‘won’t immediately impact oil prices’
There's no need to panic yet over a surge in oil prices linked to tensions in the Middle East, according to economist Graeme Korner.
This after international prices jumped 3% on Tuesday amid an Iranian air strike on Israel in retaliation for Israel's offensive in Lebanon.
"The reality is that the oil prices have been in this range for some time. I am actually surprised, considering all the tension that there has been in the Middle East, that oil has been even more volatile because this does have the potential to cascade into a broader Middle Eastern conflict.
"If we are going to see an escalation in tensions, which is looking quite likely, clearly it could push higher, and that will have a draining effect on the economy and that is not something we need right now."
Korner says the value of our rand may change things.
READ: Oil prices rise further, stocks waver on Middle East worries
"The rand has firmed up, and that is one of the reasons why motorists, when they are filling up on petrol and diesel, see quite a lot of relief over the last while.
"If you think over the last month or two the rand has actually been a little steady. You could arguably have a few weaknesses or strengths in oil being offset by gains in the rand, and you still could be in a neutral position."
An Israeli attack in Beirut on Friday killed the leader of Hezbollah.
Earlier this week, the Israeli Defence Force also said it had eliminated the leader of Hamas in Lebanon.
Tehran says the strikes it launched towards Israel yesterday were a warning. Israel says it managed to intercept most of the nearly 200 missiles - with the help of the US.
The Iran-backed group, which is a Hamas supporter, has been locked in a battle with the Israelis.
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