ISRAEL-IRAN ESCALATION COULD PUSH OIL EVEN HIGHER, ADDING INFLATIONARY PRESSURES
Brent crude prices could surge to $80-$100 a barrel if Israeli strikes were to target Iran's oil production and export facilities, potentially driving inflation higher, according to Capital Economics. Such a scenario could add about 0.5 to 1.0 percentage points to inflation in developed markets by the end of this year, economists at the firm say. "We suspect such a spike in prices would result in more OPEC+ production coming online though, thereby limiting the length of the inflation shock," they say. "But any rise in energy inflation would be another reason for central banks to proceed cautiously with cutting interest rates, and for the Fed to remain on the sidelines for now."The copyright of this article belongs to the original author/organization.
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