The expansion of the war in the Middle East could lead to a recession in the world economy, which is still recovering from the consequences of the Russian-Ukrainian war, Bloomberg Economics.

If direct conflict between Israel and Iran cannot be avoided, oil prices could soar to $150 a barrel, global growth could fall to 1.7%, and global output could drop by about $1 trillion.

"The conflict in the Middle East will shake the whole world, because this region is the most important supplier of energy carriers and a key sea route," the article says.

Analysts consider three possible scenarios of the development of events and their consequences.

In all cases, the consequences will be higher oil prices, higher inflation and slower economic growth.
However, the global consequences will depend on how far the war spreads.

The first scenario: hostilities are limited to the Gaza Strip and Israel

This year, Iran increased oil production by 700,000 barrels/day amid improving relations with the United States.
If these barrels "disappear" under US pressure, oil prices will rise by $3-4.

The impact on the world economy in such a scenario would be minimal, especially if Saudi Arabia and the UAE compensate for the losses.

The second scenario: the conflict spreads to Lebanon and Syria, where powerful armed groups supported by Iran operate.

Under such a scenario, analysts predict a 10% jump in oil prices, production losses of about $300 billion and a slowdown in growth rates to 2.4% next year.

The third scenario: direct conflict between Iran and Israel

This scenario could trigger a global recession.
Repeated strikes on Saudi Aramco facilities by Iranian proxies, as in 2019, are not excluded.

And the production capacities of Saudi Arabia and the UAE may not save the situation if Iran decides to close the Strait of Hormuz, through which a fifth of the world's oil supplies pass every day.

At the same time, analysts predict a drop in global growth to 1.7% in 2024. And world inflation may reach 6.7% next year.