A prolonged conflict in the Middle East pushing oil to $90-100pb for a sustained period would be a significant headwind for the global economy. Importers such as the euro-zone would be hit hardest, while damage to production and export capacity would cap gains for exporters in the Middle East itself. The adverse effects should be limited by central banks “looking through” the shock and avoiding rate hikes, but cuts would probably be delayed.
As the conflict in the Middle East continues to unfold, we will be hosting another online briefing at 10:00 ET/15:00 GMT on Wednesday 4th March to examine how risks to energy and financial markets and to regional and global economies are evolving. Please register here to attend.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services