There is no panic in global markets so far
The United States and Israel attacked Iran on Saturday, killing supreme leader Ayatollah Ali Khamenei and other senior officials. In retaliation, Tehran launched attacks on Israel and American bases in the region.
According to Krzysztof Zięba, a professor at the Gdańsk Technical University the situation in the Middle East has not yet caused panic on world markets and should not have a significant impact on Polish consumers. The PAP interlocutor added that the increase in global oil prices caused by the war is noticeable but moderate.
– We have a several percent increase in raw material pricesbut this is not a dramatic or extraordinary phenomenon. Markets partially expected the US strike on Iran, so the price reaction is not shocking, he said.
Gasoline at PLN 8-9 per liter? It’s unlikely
As he pointed out, price increases at Polish gas stations are inevitable, but don’t expect any sudden price jumps.
– The impact of the dollar exchange rate must be added to the cost of oilwhich strengthens in conditions of uncertainty, just like gold and other safe assets. But a scenario in which gasoline would cost PLN 8-9 per liter is unlikely. A price increase of 15-20% is possible, depending on the duration of the conflict, Zięba said in an interview with PAP.
Possible supply shock
At the same time he added that the blockade of the Strait of Hormuz, controlled by Iran, may cause a supply shock on the oil market. A quarter of the world’s crude oil and a fifth of liquefied natural gas (LNG) flow through the strait. It is the main sea route for oil from Iran, Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait and Iraq. After Saturday’s U.S. and Israeli attacks, Iran’s Revolutionary Guard announced that no units were allowed to enter the strait; hundreds of tankers were disabled on both sides.
– Blocking the strait will cause there will be significantly less oil. This cannot be fully compensated. Alternative transmission routes exist, but have at most half the strait’s capacity. So they will not completely eliminate the problem, he said.
Professor Zięba assessed the risk of a global economic crisis resulting from the current situation in the Middle East as moderate. – One factor that significantly increases this risk is the unpredictability of the American administration, and in particular Donald Trump himself – he added.
Three important factors
At the same time, he emphasized that the effects of tensions depend on three factors: the scale of the conflict, its intensity and duration. – We do not know for sure how extensive this conflict will be and whether it will cover other countries. We also do not know how intense the US and Israeli airstrikes and Iran’s response will be, or how long its most severe phase will last,” the expert noted.
He also drew attention to China’s possible reaction. Iran is not only a political ally of Beijing, but also supplies the Middle Kingdom with approximately 10 percent. the country’s total oil consumption.
What does China say about this?
– If it is true that the Americans attacked export terminal on Khark Island, which is responsible for shipping about 80 percent. Iranian crude oil almost entirely purchased by China, Beijing’s economic response is most likely – Zięba pointed out.
As for the overall impact of the war in Iran on the Polish economy, the expert pointed out that its scale should be limited.
– We will only experience minor disruptions in global trade. Changes on the oil market that we will see at gas stations may be more important. More expensive fuel increases transport costs, which may raise the prices of other goods, such as food. However, I would not be afraid of a return to double-digit inflation – it is an unlikely scenario, he said.
According to the expert, the escalation of tensions in the Middle East should not significantly affect the GDP growth rate or the employment level in Poland.
