Reuters Report: Why the Likelihood of Oil Sanctions Against Israel is Low?

Exactly 50 years after the first OPEC oil embargo against Israel's allies, the issue of oil sanctions against Israel and its allies has resurfaced following the recent Hamas-Israel war. But will sanctions be implemented this time? Many analysts, oil market observers, and politicians compare the current situation to the conditions that led to the OPEC embargo in 1973. That year, following the fourth Arab-Israeli war, Arab oil-producing countries led by Saudi Arabia imposed an oil embargo on several of Israel's allies, including the United States and Britain, in retaliation for U.S. support of Israel in the Middle East war. The embargo led to severe shortages and long lines at gas stations, significantly impacting the U.S. economy. However, Reuters reports, citing analysts and OPEC sources, that the energy world today is very different from 50 years ago, and the likelihood of a new embargo is weak. The Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, known as OPEC+, will meet next Sunday, December 5, in Vienna to decide on oil production levels. Informed sources told Reuters that participants at the meeting will likely discuss further production cuts. Which countries are calling for sanctions? Hossein Amir-Abdollahian, Iran's Foreign Minister, previously urged members of the Organization of Islamic Cooperation to impose oil sanctions and other sanctions against Israel and expel Israeli ambassadors. At that time, four OPEC sources told Reuters that despite Iran's request, no immediate action or emergency meeting was planned by the Organization of Islamic Cooperation. Ali Khamenei, the Supreme Leader of Iran, weeks after calling for oil and food sanctions against Israel, requested on Sunday that Islamic countries that have normalized relations with Israel cut these ties at least for a 'limited time.' Meanwhile, at a joint meeting of the Organization of Islamic Cooperation and the Arab League in Riyadh on November 20, Muslim countries did not agree to impose extensive sanctions against Israel at the request of Ebrahim Raisi, the President of Iran. Fifty years ago, Western countries were the main buyers of oil produced by Arab countries, but today, Asia is the main customer for OPEC crude oil, accounting for about 70% of the group's total exports. One OPEC source explained to Reuters why a new sanction is unlikely: 'The geopolitical conditions are different compared to 50 years ago.' In this context, a 1970s-style oil embargo by Gulf oil-producing countries seems unlikely as two-thirds of the oil exports of Gulf Cooperation Council members are now sold to Asian customers. Giovanni Stano, an analyst at UBS, told Reuters that China's influence in the Middle East is increasing. China, the second-largest oil consumer, has mediated between Saudi Arabia and Iran, a country that is a very important customer for Middle Eastern oil producers. Morgan Bazilian, director of the Payne Institute, stated that the energy outlook has fundamentally changed over the past 50 years. The United States is now the largest producer of oil and gas in the world and has a long-term strategic oil reserve. Hassan Nasrallah's warning: Our missiles are targeting the gas field shared with Israel. The U.S. is closely monitoring the Organization of Islamic Cooperation meeting regarding the Gaza war. The President of the World Bank is concerned about the impact of the ongoing Israel-Hamas war on the international economy. The head of the International Monetary Fund stated that the Israel-Hamas war has darkened the outlook for the global economy. Blinken says 'normalization of relations between Saudi Arabia and Israel' remains 'difficult.' OPEC's rejection of Iran's request: No sanctions are forthcoming, nor the expulsion of Israeli ambassadors.