LONDON: The ongoing Middle East conflict is sending shockwaves through the global economy, impacting energy supplies, financial markets and inflation expectations worldwide.
Here are the key economic developments linked to the war:
Saudi Arabia Intercepts Drones Near Oil Field
Saudi Arabia’s defence ministry confirmed that drones targeting the Shaybah Oil Field in the kingdom’s southeast were intercepted and destroyed.
Authorities reported that seven drones in total were shot down before reaching the oil facility.
Leaders of the Group of Seven major economies are scheduled to hold a virtual meeting to discuss the conflict’s impact, particularly the global energy situation.
Officials say economic coordination among major economies will be crucial to stabilise markets.
Central Bank Warns on Inflation
The president of the European Central Bank, Christine Lagarde, pledged that authorities would take necessary measures to prevent inflation from rising sharply during the crisis.
She said Europe must avoid the surge in inflation experienced during the 2022–2023 energy crisis.
Global Markets React
Financial markets showed mixed reactions:
Paris and London stock markets gained more than 1.5%
Frankfurt stocks rose 2.4%
Seoul market jumped over 5%
Tokyo closed 2.9% higher
However, US stock markets ended mostly lower after early gains.
UAE Refinery Shut After Drone Attack
The major oil refinery in Ruwais Refinery in the United Arab Emirates temporarily halted operations after a drone attack sparked a fire in the industrial complex.
Witnesses reported seeing flames and hearing explosions near the facility.
Egypt Raises Fuel Prices
Egypt increased domestic fuel prices by up to 30%, citing extraordinary global energy pressures caused by disruptions to oil supply and shipping routes.
The price hikes affect gasoline, diesel and vehicle natural gas.
India Tightens Gas Supply Controls
India introduced stricter controls on natural gas and cooking gas distribution after import disruptions.
Restaurant associations warned that continued supply problems could force widespread closures.
Oil Prices Stabilise After IEA Proposal
Oil prices stabilised after reports that the International Energy Agency is considering its largest-ever release of emergency oil reserves to calm markets.
The potential release could exceed the 182 million barrels released globally during the 2022 energy crisis following Russia’s invasion of Ukraine.
