Oil prices at lowest rate since 2013

Oil prices have dropped to their lowest rate for almost a year as conflicts across the world have not triggered an inflation.

There are fears the ongoing crises in Ukraine and Iraq could have the potential to drive up global oil prices but recent figures show that Brent crude oil has fallen to $103.70 (£62) a barrel, a nine-month low. Violence in Iraq was blamed for the spike in oil prices in July where it was valued at $115.71 per barrel but, despite uncertainty in the Middle Eastern country, prices have fallen back significantly.

Members of the International Energy Agency (IEA) explained that oil production in North America is ensuring that the oil markets are remaining well supplied. The organisation also added that oil prices are unlikely to rise much despite the ongoing conflicts in key oil producing areas such as the Middle East and Eastern Europe.

One of the main concerns was whether Russian president Vladimir Putin would decide to 'turn off the taps' due to Western sanctions in wake of ongoing tensions between Russia and Ukraine. However, oil analyst Malcolm Bracken told the BBC that the most testing point had passed. He explained that Mr Putin had not been tempted to disrupt oil supply during either the Crimean or Donbas crisis which were both key times to do so.

The IEA added: "US and European Union sanctions on the Russian oil sector are not providing oil markets with much support either.

"The consensus in the industry seems to be that neither set of sanctions will have any tangible near term impact on supplies. Even for the medium term, their impact appears questionable."

Tensions are still high in Ukraine with suspicions being raised about a Russian convoy of humanitarian aid which may be used as a 'trojan horse' for Russian military intervention. This is something which Russia strongly denies.

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