A serious escalation of tensions in the Middle East would send the price of oil above $100 a barrel, reversing recent bearish trends on the inflation front, according to a report by the The World Bank.
According to the said report, the forecast that crude oil prices will be an average of $84 per barrel this year, it would be considered too optimistic in the event of a worsening of the crisis.
It is noted, after all, that the rise in tension in the Middle East has already led to an increase in oil prices.
World Bank analysts estimate that the average price of Brent could rise to 92 dollars a barrel this year or even to exceed 100 dollarsdepending on the degree of potential worsening of the crisis.
The World Bank also warns that an escalation of the conflict in the Middle East could lead to rising gas, fertilizer and food prices. 1/5 of liquefied natural gas (LNG) exports pass through the Straits of Hormuz, and if the supply is cut off, the prices of fertilizers whose production depends on LNG would rise significantly, causing consequent increases in food prices as well .
If, however, no new escalations of tension follow in the near future, then the World Bank estimates that food and fertilizer prices will decrease significantly in the period 2024-2025.
On the contrary, the prices of metals (copper, aluminum), which are a key “ingredient” in the process of transitioning to more “green” technologies, are estimated to move upwards in the near future.
With information from the Guardian
