Rising oil prices and ongoing conflict are now affecting the global economy. Higher energy costs can lead to increased prices for goods and services, adding to inflation.
The Organisation for Economic Co-operation and Development (OECD) has already lowered its growth forecast for the eurozone. It also warned that inflation could rise further in 2026 due to expensive energy.
Germany, Europe’s largest economy, has also shown signs of weakness. A recent survey found that consumer confidence is falling as people worry about rising costs and economic uncertainty.
Markets react to uncertainty
Financial experts say the current situation is highly unstable. Analysts note that even small changes in news or political statements can quickly move markets.
Higher oil prices have also led to a rise in government bond yields. This means borrowing costs are increasing, which can slow down economic growth.
Experts believe that Iran may continue the conflict to maintain pressure through energy prices. Controlling supply routes gives it an advantage in negotiations.
Global leaders prepare for talks
Efforts are being made to manage the crisis. France, which currently holds the G7 Presidency, is set to host a major meeting next week.
Finance ministers, energy officials and central bank leaders from the G7 countries will gather to discuss the situation. They are expected to focus on stabilising energy markets and reducing economic risks.
Meanwhile, the World Trade Organization has warned that global trade is facing one of its worst disruptions in decades due to ongoing conflicts and rising tensions.
(With inputs from agencies)