If the Israel-Hamas war escalates, oil prices could reach ‘uncharted waters’, warns the World Bank. One of the primary reasons for this potential impact is the region’s importance to global oil production and logistics. The instability in the area is raising concerns about disruptions to oil supplies and transport routes which could lead to potential price increases. Check more about this topic from international experts.
Key Takeaways:
- According to the World Bank, oil prices could reach US$150 in 2024 as a result of the Israel-Hamas war leading to further disruption to oil supplies.
- Experts note that increased oil prices could lead to higher production costs, inflation, and increased prices for goods and services, potentially affecting economic growth and consumer spending.
- Countries should also collaborate to reduce their dependence on Middle Eastern oil by investing in alternative energy sources to mitigate the economic impact of the potential disruptions.
DevelopmentAid: How has the Israel-Hamas war affected oil prices and the global economy?
“The Israel-Hamas conflict could have a significant impact on oil prices and the global economy. The Middle East, particularly the Gulf region, is a crucial hub for oil production and transportation. Any unrest in this area can lead to concerns about the stability of oil supplies, causing volatility in oil prices. If the conflict escalates and disrupts oil production or the transportation infrastructure, this could lead to a decrease in global oil supplies, thereby driving prices higher. Higher oil prices, in turn, have widespread implications for the global economy. Increased energy costs could result in higher production costs for businesses, leading to inflationary pressures. Additionally, consumers could face higher prices for various goods and services as transportation costs rise. This could potentially slow down economic growth and impact consumer spending. Moreover, geopolitical tensions in the Middle East could create further uncertainties in financial markets, affecting investor confidence. The interconnectedness of the global economy means that disruptions in one region can have ripple effects worldwide. Therefore, monitoring the Israel-Hamas conflict is crucial not only for the parties immediately involved but also for the stability of global energy markets and the wider economic landscape.”
“The Israel-Hamas conflict looms large not only in the realm of geopolitics but also as a potential catalyst for economic consequences on a global scale. As a region central to oil production and logistics, any escalation of hostilities could disrupt oil infrastructure, resulting in supply shortages and soaring prices. These price hikes, in turn, have a cascading effect on production costs and transportation expenses, essentially imposing a hidden tax on businesses and consumers worldwide. Elevated oil prices, combined with heightened geopolitical uncertainty, can cast a pall over the global economy. Economies that are heavily dependent on oil imports could experience budgetary strains, affecting everything from consumer spending to industrial output. Moreover, the potential for turmoil in the Middle East to rattle financial markets cannot be underestimated, as investor confidence could waver, leading to volatile swings in stock prices and commodity prices. These factors, combined with high-interest rates and an inflation rate that is proving itself stubborn to control, may lead to social and economic unrest across our society.”
“The Israel-Hamas conflict has already affected oil prices as there have been surges of approximately 5% in a matter of weeks. If the conflict goes beyond the borders, oil prices will continue to surge to unpredictable levels triggering a concurrent increase in global food prices and increased global inflation. The global economy is currently exhibiting weak signs of recovery in the wake of the Covid-19 induced recession. A widening of this conflict will have a compounded adverse effect on the recovery of the global economy.”
DevelopmentAid: What measures should the international community take in this regard?
“Addressing the Israel-Hamas conflict requires a diplomatic and multilateral approach from the international community. Firstly, the United Nations and major world powers should actively engage in diplomatic efforts to facilitate dialogue between Israel and Hamas. International mediators could help to broker a ceasefire and establish a framework for negotiations to address the root causes of the conflict. Humanitarian assistance should be a priority, ensuring that aid reaches those affected by the conflict, particularly civilians in Gaza and Israel. The international community, including non-governmental organizations, should coordinate efforts to provide the necessary resources, medical aid, and support for those displaced by the violence. Furthermore, diplomatic and economic pressure should be applied to both parties to encourage a peaceful resolution. Sanctions and incentives can be leveraged to encourage compliance with international law and to promote a commitment to peaceful negotiations. Regional stakeholders, including neighboring countries, should play a constructive role in fostering stability and peace. Collaborative efforts involving regional powers can contribute to long-term solutions and address the underlying geopolitical issues contributing to the conflict. Ultimately, a comprehensive and inclusive approach, combining diplomatic, humanitarian, and economic measures, is essential to achieving a sustainable resolution to the Israel-Hamas conflict. The international community must work together to promote dialogue, understanding, and lasting peace in the region.”
“The international community must prioritize diplomatic efforts and peaceful resolutions for the Israel-Hamas conflict. Immediate measures include encouraging ceasefires, humanitarian aid, and negotiations between the parties. Additionally, nations should work to reduce their dependence on Middle Eastern oil by investing in alternative energy sources to mitigate the economic impact of potential disruptions. A long-term strategy involves addressing the underlying political issues to foster stability in the region.”
“In this regard, it is imperative that the allies of both Israel and Hamas and the international community to engage dialogue towards the containment and de-escalation of the conflict within the Israel-Hamas borders and not ‘draw lines in the global sand.’ As this may give rise to increased international tensions, increased conflict within the borders and possibly trigger further volatility in oil price, amplified global inflation and possible reoccurrence of a global recession. This should occur simultaneously with talks of containment of the internal violence and cease fires.”
See also: Can the war in Gaza trigger a global health crisis? | Experts’ Opinions
Explore over 9000 job openings in the international development sector available here. Discover how experts leverage DevelopmentAid’s advanced filters not only for job opportunities but also to access open tenders and grants directly from funding agencies. If you want to access more opportunities for individual consultants and benefit from various tools, upgrade your account to the Professional Plus Membership package.
