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https://www.theguardian.com/business/2023/oct/30/world-bank-warns-oil-price-could-soar-to-record-150-a-barrel>
"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.
“Policymakers will need to be vigilant. If the conflict were to escalate, the
global economy would face a dual energy shock for the first time in decades –
not just from the war in Ukraine but also from the Middle East.”
The Bank said in its latest commodity markets outlook that the shock to the
global economy would not be confined to energy costs but would also result in
hundreds of millions going hungry as a result of higher food prices.
In its assessment, the Bank said the Israel-Hamas war had had little impact on
commodity prices so far. Oil prices had risen by about 6%, but agricultural
commodities, industrial metals and other commodities had “barely budged”.
It added: “The outlook for commodity prices would darken quickly if the
conflict were to escalate.”"
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
