The ongoing war between the United States and Iran, specifically the blockade of the Strait of Hormuz, could plunge the world economy into recession due to rising energy costs.
| PULSE POINTS |
❓ WHAT HAPPENED: The global economy could slide into recession within weeks due to rising oil prices caused by the war between the United States and Iran, according to economic experts. 📺 DETAIL: Following the outbreak of the Iran war in late February this year, the Strait of Hormuz, a critical passage for global oil shipments, has been closed. Approximately 20 percent of the world’s oil passes through the Strait. Iran has deployed vessels and sea mines to block the strait while the U.S. has enforced a naval blockade of Iranian ports. Consequently, oil prices have spiked toward $180 per barrel, and approximately 80 countries have been forced to ration fuel. In the U.S., the average price of gas has spiked to $4.50 per gallon. Meanwhile, Third World countries are expected to face severe oil shortages by next month. As a result, a growing number of economic experts have warned that, without a peace deal, energy prices will continue to rise, exacerbating inflationary pressures and potentially driving the world economy into a recession. Even developed countries are sounding the alarm, such as France and Australia, both of which have moved to rapidly build up their gas reserves. 💬 KEY QUOTE: “If the Iran war does not end in the coming weeks and we don’t have the reopening of the Hormuz strait, I’m afraid a world recession could be on the table.” – Apostolos Tzitzikosta, Transport Commissioner for the European Union. 🎯 IMPACT: The warnings from experts at JPMorgan and elsewhere coincided with President Donald J. Trump threatening further military action unless the war is resolved soon. According to recent data, the average cost of gas in the U.S. has increased by over 50 percent. The rising cost of energy is being passed on to consumers through price hikes, crushing consumer confidence to its lowest level since records began in the 1970s. Prior to the war, the cost of gas was at a historic low, sitting below $3 per gallon. |
Join Pulse+ to comment below, and receive exclusive e-mail analyses.
.jpg){kind=link}
