World News: Tensions in Middle East threaten world economy

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Foodcom Experts
09.10.2023
World News: Tensions in Middle East threaten world economy
Summary
Table of contents
  • Global economy faces new challenges
  • Oil prices rise as a result of tensions in the Middle East
  • War and the global consequences

Tensions in the Middle East are a threat to the global economy

The global economy, still feeling the effects of last year’s pandemic and geopolitical turmoil, faces a new challenge. Recent military clashes between Israel and Hamas are increasing the risk of new waves of inflation and undermining hopes for economic recovery.

Rising oil prices

Although the overall consequences of the conflict will depend on its scale, duration, and impact on the region as a whole, the short-term effects are already being felt, particularly in the stock and oil markets (the Middle East is home to some of the world’s largest oil reserves). In response to the Hamas attack on Israel on Saturday, oil prices on world stock markets rose 4 percent on Monday.

A new era of uncertainty

The Middle East plays a key role in global supply chains, so conflicts in the region could lead to delays and lost production in various parts of the world. This could not only drive up oil prices, but also the prices of other commodities, leading to higher inflation around the world, especially in countries dependent on energy imports.

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