A section of the World Bank warns of a double energy price shock: The reasons for this lie in the Gaza conflict and the Russian war of aggression in Ukraine.
According to the World Bank, an escalation of the conflict in the Middle East could have a serious impact on the price of oil. “So far, the impact on prices has been small. However, previous military conflicts in the region often led to higher prices and volatility in commodity markets,” said a report from the Washington-based World Bank. Depending on the duration and extent, an escalation could “lead to significant disruptions to the oil supply.” This is because the region accounts for a significant proportion of oil production.
“Should the conflict escalate into a larger regional conflict, the impact on oil markets could be significant,” the report said. There is then an increased probability that the supply from the Middle East will be reduced. “Should the conflict escalate, the global economy would face a double energy shock for the first time in decades – not just from the war in Ukraine, but also from the Middle East,” warned World Bank chief economist Indermit Gill. Higher oil prices would inevitably result in higher food prices.