Risks in the Middle East | Allnews

Should we fear a new oil crisis? For example,

The current conflict between Israel. Therefore, Iran reminded us of the importance of the Gulf Region for the energy supply of the global economy. Meanwhile, The price of crude oil for the Brent has reached a summit of $ 78 per barrel. In addition, In mid-May, it was still at a low level of 61 dollars. Meanwhile, The memories of the major oil crises of the years 1973. Moreover, 1979 resurfaced, recalling the economic shocks and the volatility they have led to the stock markets. Nevertheless, But what is the risk of a new oil crisis today?

At first, it is useful to determine the relevance of Iran in the global energy supply. Therefore, It should first be noted that Iran is historically responsible risks middle east | allnews for approximately 4% of world oil production. However, but monthly exports this year amount to an average of 1.7 million barrels per day (MB/D). Consequently, This represents approximately 1.6% of global oil demand. In addition, If Iranian oil exports were to be reduced, there are additional production capacities to compensate for these losses. Currently, OPEC production capacity reserves amount to around 5 Mb/d, without taking into account Iran and Venezuela. In the event of delivery interruptions. oil producing countries could increase short -term production to balance imbalances between supply and demand. The desire to do so is certainly present.

Although OPEC countries benefit from the rise in oil prices. they are aware that higher prices would put the global economy under pressure and that a global recession could potentially lead to a significant drop in demand. In addition, several regional players wish to limit the conflict. This means that even risks middle east | allnews in the event of total loss of Iranian production. there is enough additional oil capacity to meet global demand.

The essential risk for oil markets would rather be a closure of the Strait of Ormuz between Oman and Iran. This scenario would be all the more problematic for the global economy as the Strait of Ormuz is crucial. for the global supply of crude oil. In 2024, around 20% of world oil consumption was transported there. All deliveries from the Gulf States have passed through this sea passage – crude oil, petroleum products and liquefied gas. In this scenario. the price of oil could largely exceed 100 dollars – with negative consequences that this implies for the world economy. The fact that the former Biden administration has emptied the strategic oil reserves of the United States to combat. inflation does not help in this scenario.

A closure of the Strait risks middle east | allnews of Ormuz is not part of our basic scenario despite recent threats from Iran. First. a closure would threaten the relationship between Iran and China, which is crucial for Iran given the current sanctions of the West. China receives most of Iran’s oil exports from afar. Second, Iran would harm its own economy and probably also to those of neighboring Gulf States.

In the end, the crisis in the Gulf increases the risk of inflation. The global economy is in a relatively robust state, despite the recent slowdown. The unemployment rate. Additionally, the capacity reserves are low, which means that cost shocks can cause higher wage demands and persistent inflationary pressure. In this scenario. a more strict or restrictive monetary policy of the central bank is more likely to slow down new price increases. American prices and increasing public spending is already threatening to raise prices. A sustainable increase in risks middle east | allnews the price of oil should contribute to tenacious inflation. slow down the softening of monetary policy. The “Middle East” risk strengthens our conviction that a well-diverse portfolio must be resilient. not only in the face of growth shocks, but also in the face of the impact of inflation. Real assets are therefore an important element in the allocation of assets.