Iran War Delivers Another Shock to Global Economy, "We’re in Nightmare Scenario"
- The US-Israel war with Iran is jeopardising global food security and driving up energy prices in different parts of the world
- The closure of the Strait of Hormuz intensifies economic strain, threatening poor countries with food shortages
- Many countries like India, Thailand, and the Philippines have implemented measures to cope with soaring energy costs
Legit.ng journalist Adekunle Dada has over 8 years of experience covering metro, government policy, and international issues
Iran - The United States-Israel war with the Islamic Republic of Iran is doing collateral damage to the world economy.
The ongoing war is threatening food shortages in poor countries by driving up energy and fertilizer prices.
Source: UGC
This is connected to the close of the Strait of Hormuz — through which a fifth of the world’s oil passes after the murder of the late Iran’s supreme leader, Ayatollah Ali Khamenei.
As reported by Associated Press, Maurice Obstfeld, a senior fellow at the Peterson Institute for International Economics, described the conlict as a nightmare scenario
The former chief economist at the International Monetary Fund, adding that “Now we’re in the nightmare scenario."
“For a long time, the nightmare scenario that deterred the U.S. from even thinking about an attack on Iran and which got them to urge restraint on Israel was that the Iranians would close the Strait of Hormuz."
The conflict is destabilizing fragile states such as Pakistan; and complicating options for the inflation fighters at central banks like the Federal Reserve.
Restaurants in India have warned of possible shutdowns as the government prioritizes gas supplies for households.
The situation is not different in Thailand with the suspension of overseas travel for civil servants, urging them to take stairs instead of elevators.
The Philippines has introduced a temporary four-day work week for some government agencies, while Vietnam is encouraging people to work from home.
The AAA reported that the average price of U.S. gasoline increased to $3.48 a gallon from just under $3 a week ago.
Prices could be felt even more significantly in Asia and Europe, which are more dependent on Middle Eastern oil and gas than the United States.
What US-Israeli attack on Iran means for Nigerian economy
Recall that rhe US-Israeli attack on Iran affects the Nigerian economy, especially the naira and oil revenues.
The war brings with it an opportunity for Nigeria to earn higher, but it may also increase the cost of living.
An expert believes higher international oil prices could drive the cost of petrol at filling stations CHECK OUT: Discover How to Work with Brands, Earn from Affiliate Links, and Tap into Ad Revenue.
US-Iran-Israel War might affect Nigeria
Legit.ng earlier reported that the escalating tensions in the Middle East are sending concerns through Nigeria's economy, with fuel prices alleged to skyrocket.
Economist Paul Alaje warns that the conflict could push petrol prices to higher levels, spelling trouble for households and businesses alike.
Nigerians who listened to the economist speaking during a recent interview had different things to say in the comments section.
Source: Legit.ng
Adekunle Dada (Politics and Current Affairs Editor) Adekunle Dada is a trained journalist with over 8 years of working experience. He is also a Politics/Current Affairs Editor at Legit.ng. He holds a B.Sc. in Mass Communication from Lagos State University, Ojo. Adekunle previously worked at PM News, The Sun, and Within Nigeria, where he expressed his journalistic skills with well-researched articles and features. In 2024, Adekunle obtained a certificate in advanced digital reporting from the Google News Initiative. He can be reached via adekunle.dada@corp.legit.ng.
The Associated Press (AP) The Associated Press (AP) is a not-for-profit news agency. The AP operates approximately 240 news bureaus across nearly 100 countries, producing content in English, Spanish, and Arabic.
