The world holds its breath again at the worsening tensions between Israel and Iran, a situation that keeps markets, governments, and citizens on edge. The possibility of open war between the two countries creates a genuine economic earthquake whose ripples are already being felt in key sectors, from energy to international trade.
In the last days, The world's stock markets have fallen sharply, while oil prices have soared. These initial market responses are just a prelude to the potential knock-on effects of a deeper and more prolonged escalation in the heart of the Middle East, a strategic region for the flow of raw materials and trade routes.
An energy market under tension: the oil and gas factor
Every time instability shakes the Middle East, The price of crude oil responds with dizzying increases. In the current scenario, the price of a barrel of Brent crude has jumped more than 13%, the largest daily increase since the invasion of Ukraine, reaching over $78. Analysts warn that, in the worst-case scenario, the barrel could approach $130 if the Strait of Hormuz is blocked or strategic routes are disrupted.
The key to this alarm is in the Strait of Hormuz, a narrow waterway through which approximately 20% of the world's oil and more than 35% of maritime crude oil trade transit. If Iran were to block this passage, as it has suggested on previous occasions, global energy supplies would be severely compromised, raising not only the price of oil but also that of liquefied natural gas, which is particularly important for Europe and Asia.
Even if the flow of oil is not completely cut off, the threat to Hormuz This is already enough to fuel inflation expectations and drive up fuel prices. All this while liquefied natural gas from countries like Qatar would also be unable to easily seek alternative routes, further pushing up gas prices in Europe.
Markets react: stock market crashes and a flight to safety
The nervousness is palpable in the international financial marketsFear has caused investors to withdraw money from the stock market and invest it in traditional safe havens such as government bonds and gold, whose prices have appreciated. Major European and US stock markets have lost ground, while energy and defense stocks have rebounded in the heat of the conflict.
Airlines and tourism companies are bearing the brunt, reflecting concerns about rising fuel costs and the disruption of air routes to and from the Middle East. Meanwhile, oil companies and defense contractors are seeing increases in prices, anticipating higher spending on security and energy.
The possibility of a prolonged stoppage in maritime trade, especially at critical points such as the Suez Canal or the Indian Ocean, adds fuel to the fire, affecting transport prices and the international flow of goods.
Direct impacts on inflation and economic growth
The rise in the price of oil and gas have a direct impact on global inflationRising fuel prices are quickly reflected in the cost of producing and transporting basic goods, increasing the price of groceries and reducing household purchasing power. Some experts estimate that for every 10% increase in oil prices, inflation could rise by as much as 0,4% the following year.
For economies particularly dependent on imported energy, such as the European Union and Japan, the blow would be even greater: in addition to higher energy costs, Growth could cool and the risk of stagflation could emerge (high inflation and low growth), an old specter that was already experienced during the oil crisis of the 70s. The European Central Bank could be forced to raise interest rates to contain rising prices, complicating recovery.
In other emerging markets, such as Mexico, currency volatility has increased, with significant fluctuations in the exchange rate against the dollar. This comes at a time when sanctions and restrictions on Iranian oil exports are already penalizing several consumer countries.
Supply routes and global chains under pressure
La fragility of international supply chains This is once again evident with the crisis in the Middle East. In addition to the danger of blockades in the Strait of Hormuz, there are fears of the conflict spreading to maritime routes such as the Gulf of Aden, the Suez Canal, and areas under the control of groups linked to Iran, which would increase logistical costs and delays in the delivery of goods worldwide.
Many analysts recall the experience of the pandemic, when the disruption of critical supply chains led to shortages of basic products. Now, uncertainty about the origin and arrival of components and raw materials is once again sowing doubt among industries and consumers worldwide.
Central banks, interest rates and global outlook
Faced with this situation, central banks are faced with a difficult crossroadsOn the one hand, inflationary pressure could force them to stop lowering—or even raise—interest rates, affecting investment and consumption. On the other hand, uncertainty and possible economic stagnation make it inadvisable to tighten monetary policy too much.
Experts point out that the US Federal Reserve and the ECB will act cautiously, assessing whether the energy shock is temporary or becomes a persistent threat to global growth. Meanwhile, the IMF and international organizations are already revising their GDP forecasts downwards due to the risk that the conflict will last longer than expected.
Who comes out worse?
The hardest blow will be received major oil importers, airlines and transportEurope, Japan, and Latin American economies would see their energy bills rise and their competitiveness decline. Consumers and small businesses would also notice rising prices for basic goods and services.
Instead, energy exporters and defense contractors could benefit initially, as long as demand for services and products related to energy security and supply persists.
Possible retaliation, blockades, or attacks on key infrastructure, as seen in 2019 with the Aramco facilities, would exacerbate the situation and add even more volatility to the markets.
The fear of a prolongation of the conflict and the impact on trade routes, together with the rising cost of raw materials, is presented as a major challenge for the global economy, just when the effects of previous crises have not yet dissipated.