Global economic fallout changing allegiances from a wider Israel-Iran conflict
Such actions would likely lead to skyrocketing oil prices, which could devastate the global economy, particularly in energy-dependent regions like Europe and Asia.
KUALA LUMPUR - An all-out war between Israel and Iran could significantly disrupt global trade, particularly oil supplies.
Dr Ahmad Badri Abdullah, Deputy Chief Executive Officer of the International Institute of Advanced Islamic Studies (IAIS) said Iran, a major oil exporter, could target the Strait of Hormuz, a crucial chokepoint for global oil shipments.
Such actions would likely lead to skyrocketing oil prices, which could devastate the global economy, particularly in energy-dependent regions like Europe and Asia.
He emphasised that the economic sanctions already imposed on Russia would further complicate global energy markets, creating additional instability.
"This disruption in the energy supply chain could lead to a range of consequences, including inflation in manufacturing industries and potential recessions in several countries.
"Such scenarios would exacerbate the economic challenges already being faced, driven by the geopolitical tensions prevalent in the region,” he said in an interview with Bernama in conjunction with the first anniversary of Hamas’ attack in southern Israel that has led to a bigger conflict now.
From an economic perspective, he pointed out that prolonged wars are detrimental to businesses, particularly for countries not heavily invested in arms trading.
As a result, nations in the Global South prefer comprehensive solutions, especially for ceasefires in Gaza and Lebanon.
Badri also observed a growing tendency among Arab countries to explore new alliances, moving away from their previous dependence on Western powers.
"I think they would try to side with another power like Russia and China because right now those two superpowers are very influential in that region compared to the US and other Western countries in terms of economy and influence,” he said.
If the situation escalates into a full-scale war, Arab countries may further pursue these new partnerships which has the potential to further polarise the world. - BERNAMA
