World Bank: Hamas-Israel war could lead to rising oil prices

The World Bank issued a report on Monday warning that the ongoing war between Israel and Hamas could have a significant impact on raw material prices, such as oil and agricultural products if the war escalates and spreads across the Middle East.

Already, oil prices have surged by six percent since the outbreak of the war triggered by an unprecedented attack by Hamas on Israeli territory on October 7. This attack resulted in over 1,400 casualties, primarily civilians, on the first day of the assault. Hamas also took 239 hostages, according to Israeli authorities.

Israel has responded with devastating airstrikes in the Gaza Strip, accompanied by ground military operations in recent days. The latest count from the Palestinian Ministry of Health, affiliated with Hamas, reports that over 8,000 individuals have been killed in Gaza, with nearly half of them being children.

The Israel-Hamas war comes as the Russian-Ukrainian war continues to exert pressure on global markets, causing the "largest shock to commodity markets since the 1970s," according to Indramit Ghil, Chief Economist at the World Bank.

In a statement, Ghil remarked, "This has had repercussions, causing disturbances in the global economy that persist to this day."

He also pointed out that "policymakers need to be vigilant. If the war escalates, the global economy will face a dual shock for the first time in decades due to the war in Ukraine and the conflict in the Middle East."

The World Bank noted that the potential price increases would depend on global oil prices and exports.

In an optimistic scenario, oil prices could rise by 3 to 13 percent, ranging from $93 to $102 per barrel. In a moderate scenario, prices could increase to $121, while in the worst-case scenario; oil could peak at a range of $140 to $157, surpassing levels unseen since 2008.


AFP