U.S. attacks in Syria: Return to higher oil prices would take ‘pretty dramatic’ escalation

One U.S. air strike on Syria does not an oil price crisis make, Colin Cieszynski, chief market analyst for CMC Markets in Canada, told Global News.

“So far it seems that most of the impact was overnight and it’s already fading,” Cieszynski noted.

READ MORE: U.S. missiles blast Syrian air base from where chemical weapon attack was launched

Oil prices rose from around US$51.20 to about US$52.60 upon news that the U.S. military launched 59 missiles against an airbase in Syria, after the country’s government allegedly used chemical weapons Tuesday in a rebel-held area.

READ MORE: Oil prices shoot up as Donald Trump fires missiles at Syria

The initial oil price shock was due to the market’s “surprise” at the Trump administration’s decision to engage Syria, said Cieszynski.

U.S. President Donald Trump had warned as a candidate against the U.S. becoming embroiled in the Syrian civil war.

However, the fact that oil markets have already pared back most of the overnight gains means they see the U.S. assault as “a one-time event, an attempt to send a signal or a message” to the Syrian regime and its ally Russia, Cieszynski said.

The move might also be a show of force aimed at China, whose president Xi Jinping is meeting Trump today, and North Korea, which conducted a new missile launch Wednesday.

WATCH: Trudeau: Canada fully supports ‘focused’ U.S. airstrike on Syria

1:39 Trudeau: Canada fully supports ‘focused’ U.S. airstrike on Syria

READ MORE: U.S. missile strike on Syria widely hailed by world leaders, but angers Russia

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No significant impact on gas prices in Canada

Cieszynski didn’t see any significant impact on gas prices in Canada. As oil prices rose, he noted, so did the Canadian dollar, which can help soften the effect on gasoline prices.

In addition, Statistics Canada’s March jobs market report, which showed continued gains in the labour market, also helped buoy the loonie, further limiting the likelihood of any pain at the pump for Canadians.

READ MORE: Gas prices across Metro Vancouver to drop by 7 cents: expert

Syrian conflict would need to escalate dramatically to cause a lasting oil price shock

It would take a “pretty dramatic escalation” of the Syrian conflict for oil prices to register a large and lasting increase, said Cieszynski.

Oil prices have ranged between US$40 and just under US$60 per barrel for the past year or so.

Syria isn’t a major supplier of oil, and its civil war, which has entered its seventh year, hasn’t really rattled oil markets so far, noted Cieszynski.

WATCH: Dozens killed in suspected chemical weapons attack in Syria

2:15 Dozens killed in suspected chemical weapons attack in Syria

Other major oil producers, like Iran and Iraq, would need to be dragged into the conflict for it to cause a significant oil price spike, he added.

Iran, an ally of Syrian President Bashar Assad, has condemned the Trump administration’s strike, saying the U.S. military is now fighting alongside al-Qaeda and the Islamic State.

The prospect of oil pipelines being blown up or key distribution gateways being blocked is a much more concrete scenario in the Middle East, added Cieszynski.

READ MORE: Did Donald Trump break the law by striking Syria without congressional approval?