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Oil supply concerns grow as Israel-Iran conflict escalates

The potential for a wider war in the Middle East is raising fears of a major oil supply shock that could disrupt global markets and push economies toward recession.

Peter S. Goodman reports for The New York Times.


In short:

  • Rising tensions between Israel and Iran have sparked concerns about global oil disruptions, potentially causing price spikes and economic instability.
  • Iran might retaliate against Israeli strikes by targeting oil facilities or obstructing the Strait of Hormuz, a crucial channel for global oil shipments.
  • While the U.S. and other producers could increase output to stabilize prices, poorer nations dependent on oil imports could face severe economic hardship.

Key quote:

“This is an extraordinarily precarious global situation. The world is probably the most unstable that it’s been since the Cold War.”

— Kenneth S. Rogoff, former chief economist at the International Monetary Fund who is now a professor at Harvard University

Why this matters:

A disruption in oil supplies could strain global economies already dealing with other crises like the Russia-Ukraine war. Energy-dependent regions, especially in Europe and lower-income countries, would face heightened risks of inflation and recession.

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