The Iranian-Israeli War and its Impact on the Global Economy

The Iranian-Israeli War and its Impact on the Global Economy

Whether you support or oppose, and regardless of which side you're on,

the current conflict with the other side... If you're following the destruction and smoke rising from Tehran, Abu Dhabi, Manama, and Doha, and the sirens wailing in Tel Aviv, with its residents taking shelter and their daily lives disrupted...

then you must understand that you are not far removed from the parties involved in this conflict. In fact, this conflict will impose further burdens on you if it continues, and if this crisis drags on, it will be a catastrophe for the entire global economy. This conflict is taking place in the most important region on Earth: the Arabian Gulf and the Strait of Hormuz. At least 15 million barrels of oil are produced daily by the Gulf states, in addition to their natural gas production. The problem isn't just the potential closure of this strait, but the mere existence of a military crisis. ...

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makes oil tankers refuse to enter it...and consequently, oil prices jump to unprecedented levels...due to a shortage in supply in the global oil market...with stable global demand for oil...and the reader may wonder how this affects the rise in oil prices, and I am far removed from this conflict...The rise in oil and gas prices leads to a rise in electricity prices, which most countries in the world produce using oil and gas...and electricity consumption in homes will increase...and the rise in electricity prices will lead to a new wave of inflation and a rise in the prices of all goods produced in factories...and these factories have production lines that operate on electricity...and the rise in oil prices means a rise in the prices of gasoline and diesel, which are used by all countries in the world in the field of transportation and public transport. The cost of transporting products from factories or production areas, such as agricultural products, to consumption areas and markets will rise, leading to further increases in inflation rates. Shipping and air travel costs will also rise, adding further burdens to the global economy. The closure of airspace by many countries in the Middle East will force major airlines worldwide to reroute their flights to longer, more distant routes, bypassing the conflict zone. This will consume more jet fuel, as circumventing the Middle East or the Gulf region will be longer than flying directly over it, resulting in further losses for airlines worldwide. The countries involved in this conflict, and the Gulf states in particular, will be forced to finance reconstruction after the crisis ends, impacting the incomes of their citizens. Many Middle Eastern countries rely heavily on tourism and revenue from Gulf citizens.

This impact will affect jobs and the workforce in these countries that depend on Gulf tourists. Hotels and resorts may be forced to cut staff. A percentage of the workforce was laid off due to the decline in occupancy rates at the hotel or tourist resort. Diplomacy and negotiation had to take their time. If military action leads to negotiation and pushes for further concessions, then the timing of this military action must be swift and effective, because prolonging this crisis will affect this planet, which already has many complex and unsolvable problems. 

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