Kazakh experts talk Israel-Hamas conflict, global energy price ramifications
For the past week, the world has been watching closely the Israel-Hamas conflict escalating again. The Palestinian militant group Hamas launched an attack on Israel on October 7, one of the deadliest attacks in decades. Afterward, Israel launched retaliatory air strikes. More about how the conflict may evolve and its potential impact on the region and global energy prices is in the latest article of Kazinform.
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Hamas attack on October 7 resulted in the death of more than 1,400 people and hundreds taken hostage. Following the attack, Israel launched retaliatory air strikes, killing nearly 3,000 in Gaza, before Israeli Prime Minister Benjamin Netanyahu declared on October 9 that his country was “at a war.”
Following Hamas’s attack, Israel declared a siege on Hamas-controlled Gaza, home to nearly 2.3 million Palestinians, disrupting the flow of electricity, fuel, food, goods, and water to the region. The conflict has led to a dire humanitarian situation for Palestinians, where they face challenges accessing basic necessities and healthcare.
According to the United Nations, since the start of the hostilities and as of October 17, at least 3,000 Palestinians have been killed and 12,500 have been injured. This data excludes the deaths caused by the attack on Al Ahli hospital in Gaza.
The UN data also indicates as of October 17, at least 1,300 Israelis and foreign nationals have been killed in Israel, and at least 4,121 have been injured.
Over one million people were displaced in just 10 days, and most areas in the Gaza Strip reduced to rubble.
The recent hostilities between Israel and Hamas are just the latest in a conflict that has endured for over seven decades involving Israelis and Palestinians.
While many factors preceded, the starting point is considered to be the United Nations' vote in 1947 to part land in the British mandate of Palestine into two states - one representing Palestinian Arabs and the other the Jewish population, with Jerusalem being designated as an international city according to Resolution 181.
Subsequently, one of these entities declared itself as the independent state of Israel and, during the 1948 conflict involving neighboring Arab nations, expanded its control to encompass 77 percent of the Mandate Palestine territory, which included a significant portion of Jerusalem. Nearly 700,000 Palestinians either fled or were forcibly displaced.
Jordan and Egypt took control of the remaining areas specified for the Arab state by Resolution 181. However, in the 1967 war, Israel occupied these territories, namely the Gaza Strip and the West Bank, which also encompassed East Jerusalem.
Numerous attempts to reach a peaceful two-state solution have been made, but none have led to a lasting resolution.
Kazakhstan’s stance
The Ministry of Foreign Affairs of Kazakhstan released on October 17, an official statement on an armed clash between Hamas and Israel, saying Kazakhstan “condemns the attacks by Hamas against civilians in Israel and the capture of hostages, including foreigners.”
“We support the call of the United Nations Secretary-General Antonio Guterres on immediate and unconditional release of hostages and ensure unimpeded access to humanitarian aid,” reads the statement.
It also reiterated the statement made by President of Kazakhstan Kassym-Jomart Tokayev at the Summit of the Commonwealth of Independent States (CIS) in Bishkek on October 13.
“Challenges that have not been finding their solution for decades cannot be resolved by terrorist actions. There is no justification,” said Tokayev at the summit.
The ministry’s statement states that Kazakhstan also “calls on Israel to refrain from disproportionate use of force leading to numerous victims among the civilian population of the Gaza Strip and the destruction of civil infrastructure.”
“In this situation, it is crucial to comply with the norms of international law and follow the relevant resolutions of the UN Security Council, which secure the legal rights of the Palestinian people. Violence leads to counter-violence and inevitably causes tragic consequences for the Middle East and the rest of the world,” reads the statement of the Kazakh ministry.
Kazakhstan expresses solidarity with the international community, requiring the cancellation of the established time frame to evacuate the residents of the Gaza Strip and ensure the protection of civilians who should not become hostages of the conflict.
“In this regard, Kazakhstan calls on all parties to immediate ceasefire and focus efforts on achieving a peaceful resolution based on stability and security for all residents of the region according to the two-state solution,” reads the statement.
On October 11, Kazakhstan evacuated 166 people, including 124 Kazakhstan’s citizens and 42 foreigners, on a flight back home, organized with the support of the country’s embassy in Tel Aviv.
How can the conflict unfold
Kazakh political scientist Islam Kurayev said the Middle East has always been “like a powder keg.”
“It is impossible to predict the various events and how they unfold. I think it is pretty clear who started the fire and what it led to. The fact is that the Israeli-Palestinian conflict has been going on for about 80 years, so such clashes have already become a common occurrence. Only the reasons, names, and consequences change. I believe there are many beneficiaries in this situation, as well as those who have suffered,” Kurayev told Kazinform.
While it remains difficult to assess the development of events at this stage, Kurayev does not think the situation can reach a critical point, as it was in the period from 1967 to 1973 (Arab–Israeli War).
“Israel has initiated attacks on airports in Syria, and there are mutual exchanges of fire with Lebanon at the border,” said Kurayev.
“At this point, Iran is an interested party, using its proxies in the region, but they won't engage in direct confrontation, as such a war would signify a third world war,” said the Kazakh expert.
He noted Israel continues to bomb the northern part of Gaza and has practically destroyed all the infrastructure and residential areas there. “However, they are currently holding off on the start of a ground operation due to certain issues,” he added.
Impact on global energy prices
The conflict between Israel and Hamas poses a significant geopolitical risk, the biggest after the start of the Russian actions in Ukraine in February last year.
According to the International Energy Agency’s Oil Market Report published in October, Brent crude oil futures increased by $4 per barrel on October 7 following an attack by Hamas on Israel. Traders reevaluated the geopolitical risks in the market. In September, prices had risen by $8 per barrel due to tightening balances, attributed to Saudi Arabia’s decision to extend voluntary supply cuts under the OPEC agreement.
On October 18, Brent crude futures jumped again by $1.69 to $91.59 a barrel.
“A sharp escalation in geopolitical risk in the Middle East, a region accounting for more than one-third of the world’s seaborne oil trade, has markets on edge. The surprise attack by Hamas on Israel on October 7 spurred traders to price in a $3-4/bbl risk premium when markets opened. (...) While there has been no direct impact on physical supply, markets will remain on tenterhooks as the crisis unfolds,” said the agency.
Kazakhstan’s independent oil and gas expert Dinmukhamed Kudaibergenov cited the recent forecast of the impact of the conflict on oil prices made by Bloomberg. In its October 13 article, Bloomberg estimates, if the situation escalates involving other countries, like Iran, oil prices could surge to $150 a barrel. At the same, global economic growth might shrank to 1.7 percent, causing a recession that “takes about $1 trillion off world output,” according to Bloomberg.
“This scenario takes into account changes not only in crude oil prices but also in macro indicators such as GDP and inflation index. In the short term, there may be spikes over $100 per barrel, but in this case, it is important how the leading players and producers will behave. OPEC + is still sticking to the production cut line, while Canada, the US and Europe have no such commitments,” said Kudaibergenov.
He does not rule out the potential impact of the conflict on gas prices.
“I would pay attention to the possible impact of the conflict on gas prices, given the proxy involvement of some gas-producing countries in the Middle East, exploration and production activity, including the Levantine Sea [referring to the easternmost part of the Mediterranean Se],” said the expert, noting that Israel has active gas projects in the Mediterranean Sea.
There is also a possibility of the impact of rising oil prices on the cost of kerosene, which Kazakhstan’s national air carrier plans to buy in China.
“China, unlike us, has a market-based pricing mechanism for petroleum products,” he said.
Chairman of the Presidium of the Association of Oil Service Companies of Kazakhstan Rashid Zhaksylykov said 38 percent of the world’s oil and gas energy resources are currently concentrated in the Persian Gulf.
“Since 2022, after the conflict between Russia and Ukraine, and after Russia left the full-fledged European market, the entire market was occupied by the Persian Gulf states,” said Zhaksylykov.
The conflict, first of all, impacts logistics. “It is also dangerous for oil tankers. (...) Currently, tankers carry at least 40,000-60,000 tons of oil or gas. This is a huge economic loss. To make it safe tomorrow, insurance companies will definitely increase the cost and add to the cost of the manufactured product. Therefore, this is the only factor that leads to an increase in prices,” he explained.
Long term prospects
Kurayev said reaching a long-term resolution is challenging at the moment because “there is a strong hatred.”
“Generations need to change, and the current ones should initiate a process of normalization. Then, compromises can be found. There is a striking example of the coexistence of different religions and ethnicities in Lebanon. In this case, there is also the possibility of finding a solution,” said Kurayev.
Political expert Zhanat Momynkulov said a lot of actors are involved in the protracted conflict.
“For example, they say that historic negotiations will take place between the United States and Saudi Arabia. To prevent this, Hezbollah could step in, followed by perhaps Iran and perhaps larger countries,” said the expert.
There are also risks posed for Egypt. “Because this is a big threat to Egypt, 100 million people live in the country, and secondly, some extremist radical groups may penetrate the borders of Egypt with them,” he added.
Momynkulov noted both sides should recognize the identity and rights to existence and self-determination.
In the meantime, the World Health Organization (WHO) reiterates its appeal for an end to the ongoing conflicts that have resulted in immense suffering in both Israel and the Gaza Strip. WHO has offered assistance to health officials in both Israel and the occupied Palestinian territory.
On October 12, the organization warned that the health system in the Gaza Strip is “at a breaking point.”
“Time is running out to prevent a humanitarian catastrophe if fuel and life-saving health and humanitarian supplies cannot be urgently delivered to the Gaza Strip amidst the complete blockade,” said WHO in a statement published on the official website.
The conflict has severely disrupted the provision of crucial healthcare services, including obstetric care, the management of noncommunicable illnesses like cancer and heart diseases, and the treatment of common infections.
