-Nic martin
Tensions Between Iran and Israel: The Israeli attack on Iran has shook the financial market. This has caused fear of disrupting oil supply in the world. This crisis has started at a time when Trump’s tariffs have caused turmoil in the economic world. When Israel attacked Iran on Friday, its economic impact was immediately seen. Oil prices rose and investors withdrew their money from shares and started investing in options like government bonds and gold. Brent Global Benchmark of crude oil prices rose by more than 10 percent to $ 75.15 per barrel, which is the highest in the last 5 years.
The kind of statements that are coming from both countries, there is no possibility of stress decreasing yet. Israeli Prime Minister Benyamin Netanyahu says that his military campaign will continue until the danger will be abolished ‘. His gesture is to the apprehensions that Iran is making nuclear weapons. On the other hand, Supreme leaders of Iran have also warned Israel to face strict punishment.
Effect of attack
Along with Israel and Iran, Iraq and Jordan have also closed their aircraft. As such, many airlines have canceled their flights to the region. In case of crisis, it is not safe for airlines to fly. Aviation Consultancy Oosy Flight Solutions says 6 commercial aircraft have been deliberately killed worldwide since 2001 and during this time three aircraft narrowly survived.
There is an option to change the way of flights, but it is very expensive. This not only takes more time for flights but also costs more fuel. Iran’s aircraft seems to be almost empty since the attack.
At the same time, Israel’s currency Shekel has fallen by 20 per cent against the dollar as Israel has announced a ‘special emergency’. This causes chaos in buyers. Meanwhile, some super markets saw a huge crowd of people in Israel. The Israeli media organization Yate wrote from the curse of the supermarket chain carfor that on Friday, the number of people coming to his stores recorded a jump of 300 percent.
Effect on oil supply
If the current conflict between Israel and Iran turns into a major war, it will directly affect the energy market of this region and the trade routes here. The Middle East is a large oil producing area of the world. Some of the world’s largest oil reserves and producers are here. Iran is the third largest oil producing country after Saudi Arabia and Iraq in the Middle East. Despite the international sanctions on its oil exports, Iran sells a lot of its oil to China and India.
Now all the eyes are on the Hormuj Strait, which is a narrow waterway between Iran, United Arab Emirates and Oman, but it is very important in the global trade of oil. If it was closed, as threatened many times, oil tankers will be trapped and oil prices may climb.
20 percent of all the oil consumed in the world passes through this narrow waterway. The US Energy Information Administration (EIA) says that every day 1.8 to 1.9 crore barrels are from here. If the price of oil increases, inflation increases for the common people. They have to pay more prices on many things from fuel to food.
