World Bank Warns Israel-Hamas War Could Cause Significant Global Oil Price Surge

World Bank report outlines scenarios for oil market disruption, with prices possibly surging to $150 per barrel if Israel-Gaza conflict escalates into wider Middle East crisis, exacerbating inflation and food insecurity globally.

The recent war between Israel and Hamas could lead to an unprecedented global oil price surge, as reported by The World Bank. In the worst-case scenario—where the conflict across Gaza escalates into a broader Middle Eastern crisis—oil prices could skyrocket by up to 75% to reach $157 a barrel.
Analysts have warned of a 'cascading' effect from surging oil prices on other commodities such as gas and food, potentially sparking another wave of inflation that could worsen food insecurity worldwide.
While oil prices have risen by around 6% since the start of the Israel-Hamas conflict, more significant price increases could be witnessed should the conflict increase in scale. Furthermore, if this were to coincide with energy market disruptions already caused by Russia's invasion of Ukraine, it could pose a 'dual energy shock' for the global economy.
The World Bank has stressed, however, that this is not their base scenario, as the world has become less reliant on oil to drive economic growth and oil exports from the Middle East since the 1970s. The world's share of renewables has also increased from less than 1% to almost 7% today.
If oil prices stay elevated over an extended period, food price inflation that’s high in many developing countries due to Russia's invasion of Ukraine could intensify, worsening food insecurity not just within the Middle East but also on a global scale.