Israel-Iran military war started affecting economy, crude oil prices rose

After the Israel-Iran military war started, its effect on the global economy has started to show. Crude oil prices have increased by 12% in the last 2 days. According to the WTI report, on June 13, the price of crude oil increased by 8.2% to $ 73.61 (Rs 6,337) per barrel. On June 14, the price jumped by 12.6% and the price per barrel reached $ 76.61. There are 159 liters in a barrel. In India, the price of crude oil per barrel increased by Rs 497 in the last two days.

Over 30% of oil and gas from all over the world is located in the Middle East. It also has the Strait of Hormuz, which is the channel for 20% of the global oil and gas supply. The Strait of Hormuz is crucial for delivering oil and gas from Saudi Arabia, Qatar, the UAE, Iraq, Bahrain, and Kuwait. Supply chain can get terribly hit due to the effects of this military conflict. This can raise oil prices.

Experts have estimated that the Organization of Petroleum Exporting Countries (OPEC) produces 32 lakh barrels of oil per day. 2.1 crore barrels of oil and 8 crore tonnes of natural gas pass through the Strait of Hormuz. If Iran blocks the Strait of Hormuz, this route will be in danger. This will increase inflation in the global economy, including India.

Iran has threatened the global community with dire consequences if it supports Israel. Iran said that if any country supports Israel, it will have to face dire consequences. Iran has given this threat to Arab countries, including America. America has military bases in many Arab countries, like Saudi Arabia, Oman, and Qatar, which can help Israel when the time comes.

If Arab countries indirectly help Israel in this military war, then Iran can attack their strategic and economic areas. However, the Arab world has openly opposed Israeli military action. Also, Iran has been supported. Experts said that in 2019, oil prices rose 15% after the Houthi drone attack on Saudi Arabia's oil bases. This time too, investors have felt the same fear.

After the Iran-Israel military war, the stock markets of Asia and Europe saw a decline. Japan's Nikkei stock was also down 0.9%, UK's FTSE 100 index closed down 0.39%. The  US stock market saw a decline.

Experts said that if Iran's oil production and export facilities were targeted, the price of crude oil could rise to about $80-100 per barrel. However, they said that such a rise in prices would encourage other oil producers to increase production. So that inflation can be controlled.