Three war scenarios influencing the world economy

Dramatic events in the Middle East could take a turn for the worse, leading to higher oil prices with global repercussions.
The price of Brent for December delivery rose 3.67% to around $90. WTI for November delivery rose 3.80% near $87.
Iran is in the spotlight for its unreserved support for Hamas.
What worries markets is whether Israel will attack Iranian nuclear plants and whether Tehran will respond by blocking oil tankers passing through the Strait of Hormuz and forcing Hezbollah’s army to invade the Galilee.
Tehran has kept a cautious stance so far: Iran has been very cautious so far, but no one knows how it will react after the expected Israeli ground offensive in Gaza.
The Republic of Ayatollahs does not deny the evidence, namely the logistical and financial support to Hamas. This support is reinforced by the rest of the financing network through cryptocurrencies, of unknown dimensions.
The United States

On its part, the Biden administration is proceeding with great caution. Washington has frozen funds for Iran, but shows great caution in the accusations against the Islamic Revolutionary Guard Corps.
Joe Biden, trailing in the polls, needs nothing more than a spike in oil prices to renew his term in the White House.
For this reason he is trying to convince Israel not to expand the conflict needlessly. Sanctions against Iranian oil will likely not be important resulting in minimal impact on energy prices and thus on inflation and growth. This is certainly the most optimistic scenario

Dangerous scenarios for growth

Other more dangerous cases are under consideration in various think tanks.
In summary, there are three scenarios:
First: The conflict should not extend beyond the Gaza Strip. In this case, according to Bloomberg, the effects will be limited. It is easy to foresee the resumption of the embargo against Tehran, which currently supplies the market with 700,000 barrels of oil per day. The impact on prices is expected to be around $3 a barrel, but Saudi Arabia and the United Arab Emirates could easily cover the difference.
Second: Things may get complicated if the conflict spreads to Hezbollah, involving Lebanon and Syria. In this case, based on the precedent of the 2006 conflict, the price of oil could increase by 10%, reaching $100. But the consequences could be far more serious if the crisis spreads to other countries in the region, particularly from Egypt to Tunisia. In that case, the global economic consequences would be much more severe: at least $300 billion less GDP, causing global growth to fall below 2%, one of the worst figures of the century.
Third: This is the most unlikely scenario, which involves a direct conflict between Israel and Iran, causing oil to soar above $150. But this, according to Bloomberg, would be only the first and not the most serious consequence of a conflict that could even see the use of nuclear weapons and the involvement of all the major global players.
The only thing that is certain is that geopolitics has now taken control of developments at the international level. The economy has also entered a new phase compared to the past decades when issues of open trade, inflation and low interest rates, globalization of finance and information, scientific and technological cooperation dominated.
It seems that we are moving from the globalization of trade to the globalization of wars with devastating effects on the cost of money, making it increasingly expensive and scarce for development projects.

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