The first week since the brutal Hamas attack in Israel ends with growing uncertainties in all areas, and the economy is not the least of them. At the start of the conflict, markets reacted with remarkable calmness, limiting declines in sectors such as tourism and transport. A few years later, a 4% increase in oil prices undermined that confidence and reminded us again that any instability unleashed in the Middle East has a direct impact on crude oil.
At present, the peak to which this price increase may reach is unpredictable. No one can now predict the consequences of an Israeli ground attack on Gaza. It cannot be ruled out that the conflict goes beyond Gaza’s borders and directly involves regional powers, particularly Iran, that have jurisdiction over a route vital for oil traffic through the Strait of Hormuz.
A rise in Brent to around $120 a barrel is possible, with more damaging effects on even higher global inflation levels. But the effects on global GDP will be worrisome. Every $10 increase in the price of black gold has the potential to deduct a tenth of its growth. According to current expectations, the recession is on track to reach 0.3% at a time when the global economy is already set to grow below 3% due to China’s weakness.
In Spain, even the possibility of a 1.5% advance in 2024 should be isolated, facing a crisis that threatens the economy with greater risks than the recent conflicts of the war in Ukraine.