So far, the Israeli-Hamas conflict has had little impact on the global economy. However, a direct war between Israel and Iran could cause oil prices to rise to $150 per barrel and global output to fall by $1 trillion, according to a new analysis by Bloomberg Intelligence (BI) and Bloomberg Economics (BE).
The new BI and BE study, Middle East Energy Scenarios, examines four broad scenarios and their potential impact on global GDP and inflation. These scenarios range from a long-term ceasefire to a confined conflict, a multi-front proxy war, and a larger war involving direct conflict between Israel and Iran.
Salih Yilmaz, the senior oil analyst at Bloomberg Intelligence and co-author of the report, added: “Opec+ members with spare capacities, such as Russia and Kazakhstan, would benefit because they would have room to maximize production at higher prices to compensate for reduced output from the cartel’s Gulf countries.” To compensate for some of the lost barrels and limit the impact on petrol prices, the United States would most likely have to draw from its strategic petroleum reserve.
Middle East could push prices for liquified natural gas up by at least 35 percent if a Gulf-region conflict disrupts flows from Qatar, sending more than 10 billion cubic feet of LNG through the Strait of Hormuz daily.
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