War between Israel & Palestine – Creating an Impact on the International economy, financial markets and India-Israel trade market
The outcome of the Israel-Hamas war which creates an impact on the international economy might also take time and become absolutely clear though will even get much more severe if conflict also spreads to the rest of Middle East, particularly Iran, which is quite a main oil producer as well as supporter of Hamas.
Moreover, international economy, even rattled through elevated through the inflation, is facing other level of geopolitical crisis in Middle East subsequent to surprise attack of the Hamas on Israel as well as sudden declaration of war by Israel.
The Palestinian militants has also fired above 5,000 rockets on Saturday, from Gaza Strip near Israel, which leads to 700 people killed as well as wounding many other, here worst kind of the attack on Israeli soil leads to the decades.
On the other hand, retaliation, for which Israel declared the war formally and also approved for “momentous military steps", since the military crushed the militants of Hamas in the southern towns as well as intensified their bombardment of Gaza Strip.
This toll has also cleared above 1,100 dead as well as thousands of people wounded on both sides, since fighting has also entered the third day.
Also, fallout of the war of Israel-Hamas on the global economy might also take time to become clear, however it will even become severe when conflict spreads ahead to the Middle East, particularly Iran, which is known as a key oil producer & supporter of Hamas.
The key major channel created some kind of impact on the international economy that will be through oil prices that rise near the $90 level. Also any such escalation of conflict towards some different nations of Middle Eastern that are main oil producers that also poses some kind of the great threat as well as needs to much close watch that is given that international economy is recently facing the ‘more for longer’ that scenario for interest rate," say, Economist and Standard Chartered Bank, Kanika Pasricha.
Moreover, let us understand some clear impact related to Israel-Hamas war over international markets and economy:
Increase in Oil prices: It has been observed that there is a surge in the crude oil rates. The prices of Crude oil have enhanced abruptly on Monday as tensions have also escalated in the Middle East, which is known as home to the maximum oil supply happening internationally.
However, such a crisis is also unlikely to create any such key immediate threat to oil supply till the time it spreads to different countries in a region that can also develop in the much disturbing proxy war that is embroiling Iran and the US.
Though there are some reports of Iran that is being involved in different attacks against Israel, the possible retaliation against Tehran can even endanger passage of the vessels through Strait of Hormuz, the crucial conduit which Iran has earlier threatened to close, says analyst.
Iran joins fray which may also impact the sea routes as well as which may also push up the transport cost along with the cost of insurance. The Higher crude would get distorted with the balance of the trade as well as CAD and hence put pressure on the rupee.
With the surge of crude oil prices, there is a threat of a big grasp of inflation and the international economy over the time again. Also, India, United States, China as well as other key economies are huge importers of the oil and may even see some high level of imported inflation when oil prices stay elevated.
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