Global economy’s response to Iran-Israel escalation 

Having not yet fully overcome the consequences of the 2020 coronavirus pandemic, the global economy is periodically facing new shocks. The latest, most recent, is the escalation of the Iran-Israel conflict.

Taking into account the whole region, the first most sensitive response to the developments was the oil glut. Brent crude oil inflation fluctuated within 2.5-5%.

A price increase was also observed in the non-ferrous and precious metals market.
There are more negative forecasts regarding the development of the economy. At the same time, different scenarios are considered. In the case of a long-term escalation, the forecast for oil prices is 100, 120, or 150 dollars/barrel. In that case, the global economy will face a new wave of inflation. As the most reliable reserve, the price of gold will also rise.

In the medium term, oil-producing countries will benefit from such a scenario, but in the long term, it will eventually affect oil and gas consumption.

Naturally, Armenia will be affected by such possible shocks in the global economy. We should highlight several points that concern a friendly country located in the immediate vicinity of Armenia. In that scenario, developments around all the projects that are currently on the Armenia-Iran bilateral agenda will suffer, including the gas-for-electricity project, the transport project connecting the Persian Gulf with the Black Sea, projects related to bilateral trade, etc.