Middle East situation could push oil to $157 a barrel: World Bank
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The World Bank has warned that the current war in Palestine could push worldwide oil prices.
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Active pump jacks increase pressure to draw oil toward the surface at the South Belridge Oil Field on February 26, 2022, in unincorporated Kern County, California (AFP)
The World Bank warned on Monday that an escalation of the current war in Gaza may boost global oil prices as high as $157 per barrel in extensive interruption.
In its Commodity Markets Outlook, the World Bank warned that "In a 'large disruption' scenario—comparable to the Arab oil embargo in 1973— the global oil supply would shrink by 6 million to 8 million barrels per day. That would drive prices up by 56% to 75% initially—to between $140 and $157 a barrel."
Global oil prices could rise to between $93 and $102 per barrel in a "small disruption" scenario and between $109 and $121 in a "medium disruption" scenario.
Despite the fact that the world economy is currently doing better than it did in the 1970s, the World Bank issued a warning that the conflicts in the Middle East and Ukraine may force the world's commodity markets into uncharted territory.
Additionally, the World Bank stated that rising oil costs would have a detrimental impact on food prices.
The world witnessed oil prices skyrocket following the launch of Operation Al-Aqsa Flood, with benchmark oil contracts of Brent and WTI soaring over 5% in Asian deals before gradually easing back.
Global equity markets have been experiencing a shake ever since the launch, even though energy firms were given a push by higher oil prices, which in turn gave them higher profits.
Currencies like the dollar, yen, and Swiss franc, in addition to gold, have seen support while benefiting from their status as a haven investment during severe geopolitical turmoil.
The current events in the region have triggered fear with regard to inflation and spiked prices with central banks trying to soothe interest rate hikes to avoid recessions.
Iran FM: New war fronts to open if US continues to support 'Israel'
During an interview with Bloomberg on Saturday, Iran’s Foreign Minister Hossein Amir-Abdollahian warned of ensuing new war fronts if the US continues its unconditional support for "Israel" amid its continuous massacres in Gaza.
“If the Israelis do not stop the war and continue with the killing and crimes [against the Palestinians], the opening of new fronts will be unavoidable, and that will put Israel in a new situation that will make it regret its actions,” he warned, adding that “The US is advising others to show self-restraint, but it has sided completely with Israel,” which is described by international law as an “occupying power.”
Amir-Abdollahian advised that it would backfire against Washington as well, after also advising them to act with caution to reduce tensions.
He added further that Operation Al-Aqsa Flood was a “completely Palestinian decision”.
