FILE - The World Bank building in Washington, Monday, April 5, 2021. The World Bank says oil prices could be pushed into “uncharted waters” if the violence between Israel and Hamas were to escalate. The organization's Commodity Markets Outlook finds that the effects on oil prices should be limited if the conflict doesn’t widen. (AP Photo/Andrew Harnik, File)
Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”
Important Takeaways:
- Oil prices could reach ‘uncharted waters’ if the Israel-Hamas war escalates, the World Bank says
- The World Bank reported on Monday that oil prices could be pushed into “uncharted waters” if the violence between Israel and Hamas intensifies, which could result in increased food prices worldwide.
- The World Bank’s Commodity Markets Outlook found that while the effects on oil prices should be limited if the conflict doesn’t widen, the outlook “would darken quickly if the conflict were to escalate.”
- And the threat of escalation looms. Israeli tanks and infantry pushed into Gaza over the weekend as Israeli Prime Minister Benjamin Netanyahu announced a “second stage” in the war. Hamas officials have called for more regional assistance from allies, including Iran-backed Hezbollah in Lebanon.
- The World Bank report simulates three scenarios for the global oil supply in the event of a small, medium or large disruption.
- Effects should be limited if the conflict doesn’t widen in a “small disruption” scenario — as oil prices are expected to decline from current levels of roughly $90 a barrel to an average of $81 a barrel next year, the World Bank estimates.
- But during a “medium disruption” — equivalent to the disruptions experienced during the Iraq war — the global oil supply of about 100 million barrels a day would decline by 3 million to 5 million barrels per day, driving oil prices up possibly by 35%.
- In a “large disruption” scenario — comparable to the Arab oil embargo of 1973 — the global oil supply would shrink by 6 million to 8 million barrels per day and prices could go up by 56% to 75%, or to $140 to $157 a barrel, according to the report.
- Indermit Gill, the World Bank’s chief economist, said Russia’s invasion of Ukraine has already had disruptive effects on the global economy “that persist to this day.”
- “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,” Gill said.
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