West Asia’s Escalating Crisis is Burning A Hole in Your Pockets; Here’s How | Firstpost Unpacked

West Asia’s Escalating Crisis is Burning A Hole in Your Pockets; Here’s How | Firstpost Unpacked

[Music]
as Israel’s war in Gaza unfolds analysts
are increasingly fearful of the West
Asian conflict spilling
over and and earlier this month the
six-month War saw its biggest escalation
ever Iran and Israel attacked each other
directly for the first time on April
13th Iran fired a barrage of missiles
and drones towards Israel this was in
retaliation to the alleged Israeli
attack on Tan’s Consulate in Syria and
Israel responded with another set of air
strikes pushing West Asia to the brink
this tit fortat approach led to many
global leaders raising alarms
Madame
President the Middle East is on the
brink the people of the region are
confronting a real danger of a
devastating fullscale
conflict now is the time to defuse and
escalate now is the time for maximum
restraint now while people in West Asia
face threats of violence and destruction
other parts of the world are bracing for
the wars in impact on their
pockets West Asia is a crucial region
this is for two primary reasons oil and
shipping routes West Asia is the world’s
primary source of fossil fuels it
accounts for 1/3 of the world’s total
crude oil output the region is home to
five of the world’s top 10 oil producers
including Saudi Arabia the United Arab
Emirates Iraq Iran and Kuwait
any disruption in the region impacts the
supply of oil which can lead to drastic
changes in oil prices and this is what
happened last
week after Israel’s attack on Iran oil
prices spiked by over 4% the price of
one barrel of crude oil reached nearly
$90 Market analysts speculate that if
the war escalates further prices will
likely touch
$100 oil and gas are just one part of
the problem though West Asia connects
Asia and Europe through Land and Sea a
large part of the world’s cargo passes
through this region the Red Sea and the
straight of hus are two of the most
crucial trade routes around 12% of the
world’s shipping cargo passes through
the Red Sea and any disruptions to these
routs is a significant red
flag in November last year the
yemen-based houthis hijacked a
commercial ship in the Red Sea
continuous attacks by the iran-backed
rebels posed a massive threat to
shipping firms it forced ships to change
their routs this in turn increased their
Journey Time by up to 2 weeks which
further impacted the cost of goods being
transported by these
ships so if you have systemat
systematically higher shipping costs for
manufactured goods the consumer goods
that you and I buy in the shop it takes
many months to really Translate into
higher prices but it will come so if
this situation
continues uh it will have a bearing also
on the prices we pay in the shop for our
consumer
goods in a report last year the World
Bank painted a grim picture of the
impact of escalating tensions in West
Asia it said that a continued rise in
oil prices could push food prices higher
that’s because of ancree in production
and transportation costs it also flagged
concerns of food insecurity in some
regions following the war in Gaza the
average global price of wheat Rose by $6
per metric ton in October 2023 in the
same period the price of maze also
increased by $7 meanwhile the prices of
crucial fertilizers climbed by up to $10
while prices of Commodities Rose over
threats to their supply gold also went
on an upward trajectory but for
different reasons gold is often seen as
a safe haven investment during times of
uncertainty and as the West Asian crisis
unfolded people rushed to secure their
Investments with
gold now a new escalation in the war is
expected to further push these prices
higher and all of this is likely to
severely impact our pockets raising the
cost of all essential Goods like food
and fuel in fact the international
monetary fund has also warned against
the risk of rising inflation due to
tensions in West
Asia we uh looked at a scenario where we
would have more uh geopolitical tensions
that would result in elevated oil prices
Energy prices and U shipping costs and
what we find is that this would lead to
higher price pressures in the global
economy that be higher inflation there
would be lower output and roughly uh the
estimates we have for a sustained
increase in oil prices by about
15% uh would be an increase in inflation
globally of about
0.7 uh uh perc um so there is some
effect there we are not in that scenario
right now our assessment of what has
been happening with the tensions in the
Middle East is there’s been some
increase in oil prices but it’s too
early to say whether that would be
sustained uh and it’s is not in our
Baseline but we certainly looked at it
scenario very
carefully in the last four years the
world has seen all kinds of
Crisis a global
pandemic natural calamities and a string
of
Wars while we were still recovering from
the inflation shocks due to covid-19 the
Ukraine war was already knocking on our
doors and now as another War threatens
to upend West Asia we are just beginning
to pay the price
[Music]

West Asia’s Escalating Crisis is Burning A Hole in Your Pockets; Here’s How | Firstpost Unpacked

Escalating tensions in West Asia, including Israel’s War in Gaza and direct confrontations between Iran and Israel, are causing global concern. These events have raised fears of price rises for individuals worldwide. West Asia’s pivotal role as a major oil producer and key shipping route underscores its significance in the global economy. Disruptions in this region lead to volatile oil prices, affecting everything from transportation costs to food prices worldwide. The World Bank has already warned of potential surges in oil prices and subsequent spikes in food costs, exacerbating global inflation. As conflicts persist, we explore how this can impact the pockets of ordinary people around the globe.

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West Asia | Iran | Israel | Economy | Oil | Shipping | Food | Inflation | World Bank | Gaza | War | Firstpost | News Live | World News | Latest News | Global News | International News | News | Trending News

#westasia #iran #israel #gaza #economy #oil #shipping #inflation #worldbank #gaza #war #firstpost #newslive #worldnews #latestnews #globalnews #news #internationalnews #trendingnews

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