Lusi Hooks
BBC News, business
The latest conflict between Israel and Iran could have a significant impact on global financial markets.
The price of oil immediately skyrocketed, but after the exchange of missile and drone attacks over the weekend, the price of crude fell.
The price of oil is $10 (€8,64) higher than a month ago, and fears are growing again that increased energy costs will push up the price of gasoline and food.
This scenario It was seen after the Russian invasion of Ukraine in February 2022, which affected the lives of people around the world.
How much has the price of oil increased?
Attacks immediately caused reactions in the market.
Crude oil is the main international standard.
The price has fallen to around $74,5, but is still $10 higher than the previous month.
It constantly rises and falls in response to major geopolitical events and the state of the global economy, so it is not surprising that there have been changes since the Israeli-Iranian conflict.
But the price is far below its 2024 level, and well below the peak reached two years earlier after Moscow's invasion of Kiev, when it jumped to almost $130 per barrel.
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Will gasoline prices also increase?
When the wholesale price of oil increases, gasoline also increases in price.
But more expensive energy is also reflected in the prices of almost everything: from agriculture to manufacturing.
It affects the price of agricultural machinery, product transportation, and food processing and packaging.
This only happens if energy costs are higher over a longer period of time.
Even the rise in the price of crude oil has a limited impact on gasoline and diesel.
"The general rule is that a $10 increase in the price of oil would make petrol at the pump seven pence more expensive," says David Oxley of the company Capital economics.
But he points out that this is not just about oil.
Many will remember the price shock that followed the start of the war in Ukraine.
To a large extent, this was a response to higher gasoline prices, recalls Oksil.
Many heat their homes with gas, and in the UK the price of electricity is determined in relation to the price of gas, which also rose at the start of the Middle East conflict.
But this will have a slower impact on household budgets, if there are any consequences at all, given the role of regulators in limiting prices, he adds.
Could oil prices rise further?
The current situation is "very significant and concerning," says Richard Bronze, head of geopolitics at the consulting and research firm Energy Aspects.
But he believes the impact will not be as great as the conflict in Ukraine or previous problems in the Middle East.
The main questions are how long the conflict between Israel and Iran will last, whether other countries in the region will get involved, and whether the United States will intervene.
Whether there will be consequences also depends on whether the Strait of Hormuz, a waterway off Iran's southern coast and a route to global markets for about a fifth of the world's oil production, is closed.
"It's a bottleneck and therefore a vulnerable point for global oil markets," says Bronz.
There is little chance that such a scenario will occur, although Iran has previously threatened to close it.
This external factor is driving up prices, he adds.
Unless there is a disruption in supplies, it is unlikely that oil prices will remain high.
Following the Russian invasion of Ukraine, there was a surge in demand for energy as the global economy reopened following the coronavirus pandemic.
The global economy is now facing tougher times, and oil producers from Saudi Arabia to Brazil are able to increase the supply of this resource, which would help bring down its price.
What does this mean for the world economy?
Whether energy prices will rise will depend on the further situation between Israel and Iran.
It could be a "shock to the global economy at a bad time," warns Mohammed El-Irian, chief economic advisor at the company. Allians.
"Any way you look at it, it will be negative."
"It is another shock to the stability of the global economic order led by America at a time when world trade is already shaken." Trump's tariffs.
If oil prices were to return to over $100 a barrel, inflation in developed economies would rise by one percent, which is not in favor of central banks hoping to lower interest rates, the company calculated. Capital economics.
But David Oxley thinks the chances of such a scenario are slim.
"Instability in the Middle East is nothing new, we have seen numerous conflicts before."
"It could all be over in a week," adds Oxley.
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