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How a Middle East war could impact oil prices: NYT

By Al Mayadeen English
Source: New York Times
5 Oct 2024 19:17

The New York Times op-ed warns of the growing risks to global markets, particularly oil prices, as escalating Middle East tensions raise concerns over potential supply disruptions and inflationary pressures.

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A battery of "Israel's" Iron Dome system, deployed to intercept rockets, sits in Askalan, southern occupied Palestine, Aug. 7, 2022. (AP)

The New York Times published an op-ed on Saturday detailing the mounting risks in global markets as tensions in the Middle East escalate.

The piece underscored how, despite nearly a year of escalations in the Middle East, global markets had largely remained unaffected by the potential for a wider war.

However, recent developments, including Iran's Operation True Promise II and discussions of potential attacks on Iran's oil infrastructure, have sent ripples through the financial world.

Writer Sarah Kessler argues that oil markets, in particular, are beginning to react to the possibility of a larger regional conflict, especially after US President Joe Biden revealed discussions surrounding support for a possible Israeli strike on Iran's oil facilities.

The price of Brent crude surged, registering its largest weekly gain in over a year. Investors and market strategists are now bracing for a potential oil supply shock, which could ripple through the global economy, driving up inflation and disrupting energy supplies.

Experts cited in the piece, like former Citi political analyst Tina Fordham, noted that while the situation hasn't yet reached a critical tipping point, it presents a "constellation of risks" that could converge if the conflict intensifies.

The potential for Iran to disrupt access to the Strait of Hormuz—a vital passage for 20% of the world's oil—remains a key concern.

Such an event could lead to a sharp rise in oil prices, experts warn, further fueling inflation at a time when many nations are just beginning to control price surges.

With Brent crude still below levels considered worrisome by central banks, the op-ed pointed out that if oil prices push toward $90 a barrel, it could prompt monetary authorities to rethink their economic strategies.

For now, analysts are closely monitoring not only the military developments in the region but also how the conflict could influence US elections, particularly the race for the White House in 2024.

The markets' historical tendency to discount geopolitical risks is also under scrutiny, as some investors are already hedging their bets, preparing for a more volatile period ahead.

As the op-ed concludes, the world may be witnessing the calm before a storm, with global markets awaiting "Israel's" next move and the potential for a broader war that could have severe economic consequences.

Trump wants 'Israel' to strike Iran's nuclear facilities

Ahead of a potential act of aggression from "Israel," many argue that a full-blown war with Iran is inevitable, as both the Democratic and Republican parties appear increasingly inclined toward military action against Tehran.

Earlier today, former US President and convict Donald Trump called on "Israel" to strike Iran's nuclear facilities in response to the retaliatory operation carried out on October 1, which targeted Israeli military bases and strategic sites.

During a town hall event in North Carolina, Trump said Joe Biden should have responded to questions about the nature of an Israeli attack against Iran by advocating for the bombardment of Iran's nuclear facilities.

"When they asked [Biden] him that question, the answer should have been: 'hit the nuclear first and worry about the rest later,'" he said.

Biden had previously expressed aversion and disapproval of the targeting of nuclear assets, fearing further escalation, retaliation, and the ignition of an all-out regional war.