Togetherisraelstrengthen theGazaDuring the ground offensive in the corridor, Saudi Arabia has also entered a state of high alert against the Houthi armed group. The World Bank warned on the 30th that if the conflict in the Middle East escalates, the internationaloil priceIt may rise above US$15 per barrel. If major oil producing countries cut supply, the oil price shock of the 1970s could be repeated.
The country may still be reeling from the impact of the Russia-Ukraine war due to a prolongation of the conflict between Israel and the Palestinian militia group Hamas, the British Financial Times (FT) reported in its quarterly Commodity Market Outlook report, reported by the World Bank . Commodity markets have been hit with a “double shock” of a “doubling rise” in energy and food prices.
“The latest conflict in the Middle East follows the Russo-Ukrainian war, the biggest shock to commodity markets since the 1970s,” said Indermit Gil, chief economist and senior vice president for development economics at the World Bank.
In the World Bank’s base case forecast, overall commodity prices are expected to decline by 4.1% next year, and the average price of crude oil will fall to US$81 per barrel, down from the World Bank’s previous forecast of US$90 per barrel. is less. quarter, due to slowing economic growth.
However, the report notes that if the conflict in the Middle East intensifies, the oil price outlook could reverse sharply. In a worst-case scenario, if major Arab oil producing countries such as Saudi Arabia reduce exports, international oil supply could decrease by 6 million to 8 million barrels per day, causing international oil prices to rise to US$140–157 per barrel. Done.
The report also said that in the scenario of small and medium-sized disruptions, oil prices could still rise to US$102 to US$121 per barrel. Current global oil demand is approximately 102 million barrels per day.
International oil prices rose slightly during the session on the 31st. Brent crude oil December futures rose 0.4% to US$87.81 a barrel, and West Texas Intermediate crude oil December futures also rose 0.4% to US$82.63 a barrel.
The conflict between Israel and Hamas began with Hamas’ attack on Israel on the 7th. Israel then retaliated by bombing the Gaza corridor and launching ground attacks deep into the Gaza corridor. Energy analysts warn that if oil-producing countries like Iran become actively involved, the conflict could spread beyond Israel and Palestine.
At the same time, Bloomberg News reported that there was a deadly conflict on the border with Yemen between Saudi Arabia and Iran-backed Houthi rebels. Four Saudi soldiers were killed and the Saudi army has been put on high alert.
The World Bank reported that the global economy is now more able to withstand supply shocks than in October 1973, and the Middle East is less important to global oil exports than it was 50 years ago, currently accounting for about 30% of supply. From 37% in the 1970s. %, but World Bank vice-president economist Ayhan Köse warned that 30% is still too high a proportion, “When you think about oil prices, the impact of events in the Middle East will not be limited to just the Middle East. East, but it will have a broader global impact.”
Kosar described the Russian-Ukrainian war that began in February last year as “a shock to the commodity market.” If commodity prices continue to rise due to the conflict in the Middle East, it could bring “another wave of inflation” and force the Center to step down. Banks will have to take action. “Decision-making officials have to be cautious.”