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43 min ago 2 min read
The Middle East conflict continues to impose a huge financial hit on the global economy with estimates it is costing $1bn a day.
For the second time in four years, global energy markets dependent on imported fossil fuels find themselves at the mercy of global commodity markets. Although each country’s immediate exposure to the Middle East crisis varies, all face the indirect threat of higher costs driven by tighter fossil fuel markets and elevated geopolitical risk premiums. Here we summarise the financial impacts across key sectors.
International markets
At the outset, the conflict wiped at least $5.7 trillion off global stock markets in a single week, and $11.5bn in a month, according to Bloomberg. The Middle East crisis has severely impacted Asian markets, triggering sharp stock sell-offs, surging energy costs, and widespread operational disruptions due to heavy reliance on regional energy imports. Major indices like the KOSPI and Nikkei 225 suffered significant drops, while fuel rationing and shipping disruptions directly threaten economic growth in ASEAN nations. Markets have ebbed and flowed, in tandem with ceasefire announcements and concerns over renewed escalation. UK inflation rose 3.3% in March, triggered by the biggest rise in fuel prices in three years.
US military
The Pentagon said it has spent around $29bn on the conflict so far though some sources say it could be three times that figure once overall costs from operations, weaponry and interceptors are totted up.
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