Global oil prices are likely to rise due to the ongoing conflict in Iran. William Jackson, Chief Emerging Markets Economist at Capital Economics, stated that Brent crude oil prices could reach approximately $80 per barrel even if the Iran conflict remains limited, a level last seen during the twelve-day tensions in Iran in June. Jackson warned that if the conflict persists and oil supply is disrupted, prices could climb to $100 per barrel, potentially increasing global inflation by 0.6 to 0.7 percentage points. Should the situation worsen, leading to a complete closure of the Strait of Hormuz for two to four weeks, Goldman Sachs and JP Morgan predict prices could surge to between $150 and $200 per barrel. Such a scenario could intensify the global energy crisis and cause major economies to face slowdowns or recessions. Historically, the late 1970s oil crisis caused a more than 200% increase in international oil prices, triggering a recession in the United States. Fluctuations in oil prices are highly sensitive for the global economy, as rising energy costs impact production and consumer purchasing power. The ongoing tensions in Iran and the security of vital oil transit routes in the Persian Gulf remain central concerns for global financial markets. Investors and government agencies are adopting cautious approaches in response to the escalating risks. The global effects of rising oil prices may include increased inflation, widening trade deficits, and economic slowdowns in certain countries. International organizations and economists emphasize the need for balanced strategies to mitigate potential crises.
Source: binance
