Geopolitical risk isn't what's driving oil prices anymore

Venezuelan President Nicolas Maduro speaks during the IV Gas Exporting Countries Forum (GECF) Summit in Santa Cruz de la Sierra, Bolivia. AIZAR RALDES/AFP/Getty Images Pegging oil price spikes on "geopolitical risk" is not only wrong but careless.  Most recently the oil market movers are Saudi Arabia and Iran. In the US, a shale boom is helping drive down prices, for now... At the end of October, Brent crude prices crossed $60 per barrel for the first time in two years. They peaked at around $64. Experts explained the spike with vague references to "geopolitical risk," without really detailing what those risks entailed. Such explanations are not wrong, but they are careless. A proper geopolitical risk assessment goes beyond vague wording. It contains a deep understanding of relevant economic, political, and military factors. Threats to supply are overblown For weeks, events in Saudi Arabia have been cited in commentary on oil markets. It all comes down to the rivalry between Saudi Arabia and Iran . A rivalry that plays out throughout the region, in Yemen, Lebanon, Iraq, Syria, and elsewhere. (We wrote pdf ebook about geopolitical developments in the Middle East in our exclusive e-book, The World Explained in Maps , which you can download here .) Saudi Arabia is trying to keep Iran preoccupied so that pdf ebook it cannot gain too much ground in Syria, where the Islamic State has now lost nearly all of its territory.