How escalation in Middle East spills over, impacts global economy
The ongoing US-Israel joint military strikes on Iran have entered their fifth week, causing a systemic economic shock that is reverberating through energy markets, industrial supply chains, and critical maritime routes. The conflict has driven up oil and gas prices worldwide, with US West Texas Intermediate crude reaching over $100 and global benchmark Brent crude settling at $112.78 a barrel.
The US-Israel joint military strikes on Iran have entered their fifth week. Iran has restricted navigation through the Strait of Hormuz, targeting ships associated with the US and Israel. This has driven up oil and gas prices worldwide. The US and global benchmark crude prices have reached record highs. The conflict is also affecting global equity markets, with major US indices dropping over 7% and the pan-European STOXX 600 index sliding over 8%. The WTO has warned that sustained high energy prices could reduce the 2026 global GDP forecast by 0.3 percentage points.
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