Middle East conflict scenarios

Potential fallout of a widening Israel-Hamas conflict could result in a spike in oil prices pushing the global economy – battered by inflation, pandemic and war in Ukraine – into recession 

SCENARIO 1
Confined conflict:

Economic
impact on global economy is limited. During conflict, Brent crude oil falls from
$111.80 per barrel to $101.61

SCENARIO 2
Proxy war: Conflict involving Iran-backed militant groups in
Lebanon, Syria, Iraq and Yemen. Lebanon War of 2006 cost estimated 120 Israeli lives and more than 1,000 Hezbollah lives

Direct conflict oil prices rise by $5 to $73.67 per barrel, global inflation rises to 5.6% and global growth is cut by 2.4%

SCENARIO 3
Full scale war: Direct conflict between Israel and Iran would imperil safety and livelihoods of millions of people across region - and all over world

Oil could hit $150, pushing global inflation to 6.7%.
Growth likely to drop to 1.7%, causing recession, wiping $1 trillion off world economy 


LEBANON
SYRIA
IRAQ
IRAN
ISRAEL
YEMEN
SAUDI ARABIA
Persian Gulf
Gaza Strip
West Bank
Red Sea
Gulf of Aden
Iranian-controlled Strait of Hormuz
Houthi-controlled territory

Sources: Bloomberg Economics, U.S. Energy Information Administration © GRAPHIC NEWS