How Middle East Tensions Affect Oil Prices?
Tensions between Iran and Israel are pushing oil prices up. US and EU sanctions are also contributing to this situation. How will this affect the global economy?
The escalating tensions in the Middle East in recent weeks have worried those who closely monitor the global economy. Iran’s attack on Israel and Israel’s retaliation have turned the region into a powder keg. This situation has also caused significant increases in oil prices.
WTI crude oil futures recovered their early losses on Friday and rose above $83 per barrel. This was despite Iran’s announcement that it would not retaliate against Israel’s attack. Investors are worried about further escalation of tensions in the region and disruptions in oil supply.
Iran Sanctions:
The US and the EU are also increasing sanctions against Iran. On Thursday, the US imposed new sanctions targeting 16 individuals and two entities linked to Iran’s drone program. The EU is also considering new restrictions on Iranian oil. These sanctions will make it more difficult for Iran to export oil, reducing supply on the global market and contributing to higher prices.
Brent Oil Prices:
Brent crude oil was also affected by last weekend’s tensions. It declined by around 4% on a weekly basis after a 0.7% drop in the previous period.
Impact on the Global Economy:
The rise in oil prices will also have a negative impact on the global economy. Especially developing countries will be more affected by the rise in energy prices. This may lead to higher inflation and a slowdown in economic growth.
Tensions in the Middle East continue to negatively affect oil prices and the global economy. How long this situation will last and what the consequences will be remains uncertain.
