The International Monetary Fund's Director, Kristalina Georgieva, indicated that US strikes on Iran could harm global economic growth by causing energy prices to spike. She highlighted the potential for significant ripple effects on large economies if oil prices surge due to disruptions in the Strait of Hormuz, a crucial shipping channel. The Iranian parliament's vote to shut the strait in response to US actions poses a risk of an oil supply shock and rising inflation. Concerns have heightened, especially after oil prices rose dramatically, with predictions suggesting further increases should disruptions occur.
If the strait is shut, it could create an oil supply shock that drives up energy prices, pushing up inflation and hitting economic growth.
Georgieva stated that the IMF was watching energy prices closely, warning a rise in oil prices could have a ripple effect throughout the global economy.
The price could hit $110 a barrel if oil flows through the critical waterway were halved for a month and then remained down 10% for the following 11 months.
Marco Rubio emphasized it would be economic suicide for Iran to close the strait and called on China to urge Tehran against it.
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