Oil prices surged on Monday, triggering a stark sell-off across global stock markets amid growing concern that the US-Israel conflict with Iran could set the stage for a worldwide economic shock.
While prices fell back on Tuesday after Donald Trump suggested the Middle East conflict could end “very soon”, oil continues to trade at high levels, sustaining fears of stagflation where economic activity stagnates but inflation rises.
Economists warn that the war has caused an energy supply crisis, risking higher inflation and interest rates while weakening growth, potentially leading to a period of stagflation for the global economy.
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