World war 3: Cooking up in the Middle East
Athish Ravikanth
Export | Global Market Strategist | Data Driven | Travel | Blogger
Introduction:
Once upon a time, it seemed like the Ukraine-Russia conflict was the world's biggest issue. But now, it appears that the Ukraine war has transformed into a battleground between the West (mainly Europe and the USA) and Russia. Many believe that the real war might erupt in the Middle East, potentially triggering World War III. In this blog, we'll explore the complex situation unfolding in the Middle East, with a focus on Israel, Iran, and the potential global consequences.
Israel and Hamas:
Israel has faced multiple attacks from groups like Hezbollah and Hamas in the past. However, the recent Hamas attack on October 7, 2023, was particularly devastating, likened to being ten times worse than 9/11 when considering Israel's population. In response, Israel has pledged to take significant action, even considering evacuating half of the Gaza Strip.
Iran's Warning and UN's Involvement:
Iran has officially warned through the United Nations that if Israel launches a ground attack to take control of North Gaza, dire consequences and a humanitarian crisis could ensue. Iran's Foreign Minister, Hossein Amirabdollahian, stated that they "cannot remain a spectator" as Israel escalates its counterattacks in Gaza.
USA's Support for Israel:
Upon Israel's announcement to control North Gaza, the USA immediately extended its support. They warned that any country, including Iran, entering the Israel-Hamas conflict would have to face the USA directly. Iran is backing Gaza fervently, leading to a heightened state of unrest throughout the Middle East, with top officials from various countries convening to discuss the Hamas-Israel conflict.
Potential Global Conflict:
Should the USA and Iran engage in the war, it is likely to happen directly or indirectly in a Middle Eastern country, such as Syria or Lebanon. The sides could be split, with the USA, Israel, and several Western and European countries on one side, and Iran, Russia, China, Lebanon, Palestine, and other Middle Eastern nations on the other. The role of Turkey, a NATO country, remains uncertain.
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The Middle East's Vital Role:
The Middle East is a crucial supplier of energy and provides key shipping passageways. If a full-fledged war erupts, the world economy may suffer greatly. Trade will be severely impacted, oil prices will surge, and shipping routes will be disrupted. Saudi Arabia has already suspended all bilateral relationships with Israel.
Possible Impacts on Global Economy:
Should Iran-backed Hezbollah enter the conflict, it may lead to severe sanctions on Iranian oil. Analysts predict that oil prices could increase by $8 per barrel, global GDP could drop by 0.3%, and inflation could rise by 0.2%. In a scenario where Israel has to fight on two fronts – against Hezbollah in the north and Hamas in the south – the consequences could be dire.
Dire Scenario with Iran:
If a direct war between Iran and Israel occurs, a Bloomberg report suggests that oil prices could soar by $64 per barrel, global GDP could plummet by 1%, and global inflation could rise by 1.2%.
Conclusion:
The Middle East is a ticking time bomb that has the potential to disrupt the world economy and trigger a global conflict of immense proportions. As the situation unfolds, it's crucial to monitor developments closely and hope for diplomatic solutions to avert catastrophe.