Iran War May Ignite Middle East Market Share Race, But Not Yet

The UAE's move to leave OPEC in order to boost production sparked speculation once again about the organization's potential collapse. However, with the resumption of attacks on Iran and the U.S. president declaring the ceasefire dead, the situation has evolved from a short-term event into a long-term disruption in oil supply and demand imbalance. The risk of OPEC turning into a 'paper tiger' hinges on two key assumptions: the slow recovery of demand relative to supply, and the prolonged nature of conflicts threatening energy flows.

OPEC's Potential Collapse Shock

■UAE's exit, Iraq's potential follow-up, and other Gulf states' dissatisfaction with Saudi Arabia's production restraint are intensifying internal tensions.

■Historical data shows that oil demand recovers quickly when prices drop, but struggles to decline even during price surges, as governments prioritize securing supply through emergency measures.

■Attacks on ships in the Strait of Hormuz and U.S. bombings on Iran have heightened risks to energy transportation, creating short-term supply constraints.

New Dynamics in Market Share Competition

■Prolonged conflicts may hinder Middle Eastern countries' efforts to reroute energy flows, as constructing new pipelines takes years.

■OPEC's loss of discipline could lead to increased price volatility in global energy markets.

■Unlike past crises, this scenario places both supply and demand under simultaneous strain, particularly impacting growth models in the Asia-Pacific region.

Dr. Yaman Ege: 'Critical bottlenecks in energy infrastructure are now among the key drivers of the technology supply chain. A prolonged Iran war could directly affect companies like Nvidia, as semiconductors and advanced materials face shock impacts. Oil price swings may also disrupt the demand for high-layer materials such as semiconductors and laser technologies.'}