Oil prices rose slightly following the ouster of Syrian President Bashar al-Assad, but the broader reaction has muted.

On Monday, Brent crude rose 1.15% to US$71.94 per barrel and West Texas Intermediate rose 1.41% to US$68.15 per barrel. The change comes after both benchmarks declined for three consecutive sessions.

Syria is not a major oil producer, pumping just 40,000 barrels per day, compared to more than 600,000 barrels per day in the early 2000s, but its location near major oil producers such as Iraq and Saudi Arabia makes it a market A geopolitical risk premium is added to the Analysts said the fall of Assad, long supported by Russia and Iran, could have far-reaching implications for regional political stability.

Traders appear to be paying more attention to other factors, particularly signals from China. Beijing’s Politburo announced plans to adopt a “moderately accommodative” monetary policy, marking the first shift to such a policy since 2008. The news raised hopes for an increase in oil demand from the world’s largest oil importer. Colin Sisinski, chief market strategist at SIA Wealth Management, said China’s policy shifts are a bigger driver of oil prices than the political turmoil in Syria.

Reaction in broader financial markets was mixed. Germany’s DAX index fell by 0.19%, while France’s CAC40 index rose by 0.72% and Britain’s FTSE100 index rose by 0.52%. Asian markets were more volatile, with Tokyo’s Nikkei Stock Average rising 0.18%, while South Korea’s Kospi fell 2.78% amid political uncertainty related to President Yun Seok-Yeong’s impeachment-related issues.

Traders remain focused on global oil supply and demand, although the collapse of Syria has added to the uncertainty. For now, market pressures are balanced by production increases in non-OPEC+ producers such as the US and Brazil, and OPEC+’s decision to postpone production increases until mid-2024.