The world of geopolitics is a complex and intricate web where every action can trigger a ripple effect that reverberates globally. This past weekend, we saw this principle in action as two major conflicts, the Israel-Iran war, and the Ukraine-Russia war, escalated significantly. The implications of these developments are far-reaching, with potential impacts on the U.S. economy and the upcoming presidential election.
The shift in the Israel-Iran conflict
Up until this past weekend, the Israel-Iran conflict was primarily a proxy war. Iran was funding groups like Hamas and Hezbollah to wage war against Israel indirectly. However, the dynamics of this conflict took a dramatic turn when Iran launched a direct attack on Israel, firing 100 missiles. This marked a significant escalation from proxy warfare to direct conflict.
Israel, in response, has vowed to retaliate. The nature of this retaliation is yet to be seen, but it is likely to be significant and could potentially target Iran’s oil production, a critical component of its economy. Iran is the world’s 9th largest oil producer, and any disruption to its oil production could have global implications.
The Ukraine-Russia conflict and its economic impact
At the same time, the conflict between Ukraine and Russia also escalated. Ukraine launched drone attacks on 18 oil refineries in Russia, effectively taking 647,000 barrels of oil production offline each day. This action has a direct impact on the global oil market, potentially leading to a significant increase in oil prices.
The economic impact: inflation and oil prices
The economic impact of these es