Syria’s revolution could impact US gas prices. Here’s how.

The worth of oil climbed about 2% in early market activity on Monday in the wake of the sudden collapse of the Assad regime in Syria.

Syria, which is not a major oil producer, has endured severe economic damage over the course of a nearly 15-year civil war.

The country occupies a key strategic post in the oil wealthy Middle East, neighboring regional powers Israel and Turkey. The Assad regime had allied closely with Iran, one of the globe’s key oil exporters.

The tumult in Syria poses little immediate threat to oil or gasoline prices in the U.S., since Syria plays no meaningful role in global oil supply. Further unrest in the region, however, could disrupt oil output and send prices higher, according to experts.

“The immediate result is an unexpected shock but it doesn’t really transformation oil prices,” Timothy Fitzgerald, a professor of business economics at the University of Tennessee who studies the petroleum industry, told ABC information.

The slight bump in oil prices on Monday owed to the lack of clarity about the transfer of power in Syria and the implications of what may pursue it, Fitzgerald added, saying a potential wider dispute could further hike prices.

“There is some uncertainty about what’s going to arise in the place of the Assad regime,” Fitzgerald said.

Oil prices make up the primary input that determines the worth of gasoline at the pump. A rise in oil prices can also boost costs for an array of customer goods as a outcome of higher transport costs. After rising on Monday, the worth of a barrel of oil stands at about $68, well below this year’s peak of $87 in April.

After civil war broke out in 2011, the Syrian economy deteriorated. Between 2010 and 2019, Syria’s gross domestic product shrank by as much as nearly 80%, a globe financial institution study found. Earlier this year, the globe financial institution estimated that about seven out of every 10 people in Syria lived in poverty.

Even before the civil war, Syria was not a major oil producer, but the industry made up an significant part of the country’s economy. Once war broke out, production plummeted. Oil output fell from an average of 400,000 barrels a day before the war to 25,000 barrels a day in May 2015, according to the U.S. vigor Information Administration a government agency.

“Syria is not a meaningful producer,” Gian Maria Milesi-Ferretti, a elder fellow in economic studies at the Brookings Institution’s Hutchins Center for financial and economic strategy, told ABC information.

“Repercussions would have to arrive from the fallout elsewhere in the region — but those at the instant are very ambiguous,” Milesi-Ferretti added.

dispute in the Middle East has escalated since last year.

The ceasefire in Lebanon is holding despite ongoing Israeli airstrikes on Hezbollah targets, which Israeli officials declare are responses to ceasefire violations by the Iranian-backed militant throng. The Israel Defense Forces continues its intense airstrike and ground campaigns in Gaza.

Tensions also remain high between Israel and Iran after tit-for-tat long-range strikes in recent months and threats of further military action from both sides.

Some experts who spoke to ABC information identified Iran as the most likely site of a potential oil worth shock if further dispute emerges in the region.

Iran is the fourth-largest crude oil producer in OPEC, an alliance of oil-producing countries with significant influence over global oil prices, the EIA says. The country accounts for roughly 3% of global oil production, EIA data shows.

Iran also asserts control over the passage of tankers through the Strait of Hormuz, a market activity route that facilitates the transport of about 15% of global oil supply.

“The Assad regime has been an significant surrogate for Iran,” Fitzgerald said. “Iran has the ability to affect oil markets a lot more than Syria. Anything that affects their upcoming trajectory of exports matters.”

A surge in U.S. production over recent years would assist limit the impact of a feasible supply disruption, though oil prices are set on a global trade, where a major supply shock could not be entirely accounted for with U.S. oil output.

Omar Dahi, a visiting scholar at the Carnegie Middle East Center who studies Syria, echoed the view.

“At the international level, [oil prices] won’t be affected by Syrian production, which is minimal. But it might be if there’s further regional escalation, for example against Iran,” Dahi said.

To be sure, some experts emphasized other factors that may affect oil prices, including lower profit rates in China that could boost demand, as well as a feasible boost in U.S. production under President-elect Donald Trump.

The ultimate outcome of events in Syria remains doubtful, leaving the implications for U.S. oil and gas prices largely unknown.

“In the long run, it really depends on what develops,” Fitzgerald said.

ABC information’ David Brennan and Meredith Deliso contributed to this update.