The real threat to global economic stability remains the possibility that, with Iran drawn deeper into the conflict, Tehran could target oil infrastructure and trading routes in the Persian Gulf, through which roughly 25% of global oil shipments travel. "A closure there would be unprecedented," says Gott, "There would be immediate, massive implications."
Johan Gott, cofounder of Prism, a consulting company specializing in political risk, says Iran's stunning attack demonstrated that Tehran doesn't have the capacity to damage the parts of Israel's infrastructure and industry that are connected to the global economy, such as its semiconductor sector. "We have removed that worry on a large scale," he tells Fortune, "at least thus far."
From a humanitarian standpoint, the ongoing, widening conflict-now also involving several strikes in densely populated areas of Lebanon-following a year of devastating loss of life in Gaza and the Oct 7. terror attacks, is dire and alarming. But from an economic perspective, the escalation doesn't represent a crisis-yet.
Thus far, oil prices have been kept in check, despite the high risk of conflict in the Middle East, a bit of a historical anomaly. But Israeli strikes on Iranian oil production or Iranian disruption of oil exports of the Persian Gulf states (Saudi Arabia, UAE, etc.) would change that immediately.
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