GUARDIAN US: Escalation of Israel-Hamas war into Middle East-wide conflict would disrupt oil supplies and stoke food prices, says Bank
Oil prices could soar to a record high of more than $150 a barrel if the war between Israel and Hamas leads to a repeat of the full-scale conflict in the Middle East witnessed 50 years ago, the World Bank has warned.
In the first major assessment of the economic risks of an escalation of the war beyond Gaza’s borders, the World Bank said there was a risk of the cost of crude entering “uncharted waters”.
A “large disruption” scenario comparable with the Arab oil boycott of the west in 1973 would create supply shortages that would lead to the price of a barrel of oil increasing from about $90 to between $140 and 157. The previous record – unadjusted for inflation – was $147 a barrel in 2008.
“The latest conflict in the Middle East comes on the heels of the biggest shock to commodity markets since the 1970s – Russia’s war with Ukraine,” said Indermit Gill, the World Bank’s chief economist. “That had disruptive effects on the global economy that persist to this day. » | Larry Elliott, Economics editor | Monday, October 30, 2023
