Muscat ( CNN ) -- The oil market is caught in a pricing tug of war . It is clear emerging markets are beginning a slowdown which will likely cut demand for crude oil over the next year . The panic selling in equity markets from Indonesia to India , Dubai to Sao Paolo is a leading indicator of what may be ahead in 2014 . But at this juncture , the likelihood of military intervention in Syria , daily bombings and killings in Iraq , and uncertainty about the flow of crude through Egypt 's Suez Canal are far outweighing concerns about the developing world 's waning thirst for energy . Energy traders acknowledge the return of the so-called Middle East risk premium -- calculated to be $ 10 to $ 15 dollars a barrel . It is based on whether supplies might indeed be interrupted or , in the case of Iraq after four months of intense bombings , production has fallen below market expectations . For a record three years running , North Sea Brent crude has averaged more than $ 100 barrel . As a result , the dozen members of OPEC , dominated by the major producers of the Gulf , earned one and a quarter trillion dollars in 2012 . This was , in part , because of the cloud of uncertainty that hovers over the region . Read more : Egypt 's cycle of violence threatens to destroy country 's fragile economy . It is a difficult balancing act . An escalation of violence triggered by military attacks on Syria is pushing crude well above what oil kingpin Saudi Arabia believes is a fair price of $ 100 . This fills the coffers of the six Gulf states , who in a post-Arab Spring- environment are spending record amounts to fund economic development , create jobs and buy internal peace . Watch more : Struggling to survive in Syria . If crude gyrates higher -- as it did in 2008 , when it surged past $ 145 a barrel -- future demand could plummet and so too could oil prices . This is what happened in the second half of that year , when prices fell to below $ 40 . Oman 's long-serving central bank chief , Hamood Sangour Al Zadjali , told me that many attempts are being made behind the scenes to return calm to the region . But when asked if there could be a further push on the upside for crude as a result of what is transpiring regionally , he said : `` That could be true , and that would be beneficial for us because we still depend largely on oil prices for our budget revenues . '' Read more : Iraq : Why violence and oil do n't mix . Oman sits near the mouth of world 's busiest oil shipping lane , the Strait of Hormuz . It is now producing about 935,000 barrels a day , according to energy officials who spoke to me on background . The Sultanate 's 2013 budget was built on oil projections of $ 85 a barrel , with energy making up 80 % of total revenues . The near $ 25 premium over Oman 's projections will wipe out a planned budget deficit , officials told me . While regional oil producers may be swimming in additional funds , the higher prices will hit the economies which are running current account deficits and are subject to the capital flight we see today . Watch more : Britain , France support action in Syria . Indonesia , India , Turkey top the list of the most vulnerable . With their currencies under severe pressure , there is the added danger of skyrocketing inflation due to higher imported energy costs . It may all sound a bit alarmist at this stage , with the mad dash of money out of emerging markets , but strategists suggest this is not the 1997 -- 1998 Asian financial crisis all over again . Watch more : UN : Syria 's chemical use unacceptable . Two years ago , countries such as Brazil complained their currencies were overvalued and that in turn was undermining export growth . Now we are in midst of the pendulum , and perhaps overshooting in the other direction . That may be today 's narrative in a climate of so much uncertainty , but policymakers and energy planners in the region say it is way too early to call an end to the long term trend of rising emerging market demand . Oman 's central banker is one of those . `` We think the growth momentum will continue in these countries and there will be demand for Omani oil , '' Al Zadjali told me . The country is banking on it , with BP and the government putting up to $ 20 billion into a new natural gas field . More tenders for additional exploration are in the pipeline , officials tell me . Oman , perched on the edge of the Arabian Sea , sees itself outside the region 's real danger zones , Syria , Iraq and Egypt . But it is too early to suggest in this geo-political climate whether that will remain the case .
Energy traders acknowledge the value of the so - called Middle East risk price -- $ 10 to $ 15 dollars a barrel . Military pressure on Syria is pushing crude well above what oil producer Saudi Arabia believes is a fair price of $ 100 . The higher prices will benefit the economies which are running current account deficits and are subject to the capital flight .