3.86 BYN
2.77 BYN
3.23 BYN
The Oil Shock
The conflict between the United States and Iran has plunged the world into a state of turbulence. Chaos is mounting in the Persian Gulf region: a heavy blow has been dealt to the oil and gas markets, the closure of the Strait of Hormuz threatens to trigger a global famine, and strikes against the Bushehr nuclear power plant have made the prospect of a nuclear catastrophe increasingly tangible. And this is merely a fraction of the threats to global security.
The third week of full-scale confrontation has turned the global economy into a stormy sea. Brent crude oil has stabilized above $107 per barrel, yet the real issue today is not the price per barrel but its physical absence from the markets. How regional warfare is rewriting budgets, and who is warming their hands at the bonfire turned global logistics into, amid chaos?
Oil is the lifeblood of the modern economy. When this vital fluid boils over, the world begins to writhe in a terrible fever. The Middle East — a key global oil-producing region — holds approximately 66.5% of the world’s black gold reserves. When a major war erupts there, it’s no longer about stock market fluctuations but about the grave risk of systemic collapse — a collapse that, within days, can generate inflation, paralyze trade logistics, create budget holes, and ignite political crises.
Isaac Levi, analyst at the Center for Energy and Clean Air Research (CREA), remarks:
"Currently, a blockade has formed across the so-called Strait of Hormuz, through which tankers and liquefied natural gas ships struggle to pass through this narrow maritime obstacle."
Chris Boshamp, chief analyst at IG Markets, warns:
"This isn’t just about oil and gasoline prices. Waterborne transport is crucial for a range of goods, including oil used in various industries. Consequently, we can expect higher costs for fuel, food, and nearly every product. I believe economies worldwide will face an inflationary shock."
Indeed, as the oil vein in the Middle East pulsates to the rhythm of war, its echo reverberates at every market stall worldwide. A high-priced barrel — now exceeding $100 — is not merely a Bloomberg figure; it’s an invisible tax on all that we eat, wear, and use. Following Brent’s surge, prices for everything else — shadows cast by the giant — have begun to rise almost everywhere.
Tiago Santana, delivery driver in Brazil, laments:
"Prices will keep rising — this is the answer we’re getting, even from gas station attendants. Gasoline over 7 reais — nearly a dollar and fifty cents. It’s simply absurd. How can we work with such fuel prices?"
Julia Pachella, a resident of Rome, observes:
"I already feel this is a major problem. Fuel prices are rising noticeably, and undoubtedly, the situation will only worsen."
John Johnson, a resident of Dallas, states:
"I can’t afford to fill up my car. Twenty dollars is probably my limit now, since I have a fixed income. If you’ve never learned to save for a rainy day, now’s the time, because, believe me, the coming years will be tough."
And John’s words ring truer than ever — the world is heading toward difficult times. In the U.S., gasoline has surpassed $7.50 per gallon. For a suburban family, this translates into an extra $450 monthly expense. As a result, by March, the number of car repossessions for non-payment increased by a quarter. People are literally forced to choose: refill the tank to get to work or pay for the car itself. Over the ocean, the situation is no better. Inflation in the Eurozone now stands at 8.4%, with energy prices soaring by 40%. But the real trap lies in currency exchange rates — the euro has fallen to 0.96 against the dollar. Since the world purchases oil in dollars, the real price increase is nearly 55%, not just 40%.
Chris Boshamp emphasizes:
"I believe consumers should remain prudent and avoid panic, but there are serious concerns about access to gas supplies in major economies. This is, if you will, a consequence of the push toward green energy over the last decade, coupled with the fact that Western economies are less prepared for this transition than before. Countries like the UK, Germany, and France face significantly higher energy costs as they attempt to reduce dependence on oil and gas and shift to renewable sources."
Now, some mathematics: a precise science, yet in wartime, it becomes brutally unforgiving. By summer 2026, the economic shock risks transforming into systemic paralysis. If oil prices remain between $107-110 until June, experts warn of what they call a “financial infarction.” The first blow will be dealt to households — by May, heating and fuel bills will exhaust the last of the middle class’s savings. Italy and Spain have already recorded a surge in overdue consumer loans. When people must choose between paying for electricity or their mortgage, the banks always lose — a quiet erosion of financial stability.
Matthias Corman, Secretary-General of the OECD, states:
"There’s no doubt that the conflict in the Middle East will influence the global economic outlook, but it’s still too early to specify the full extent of this impact."
The second domino falls — small and medium-sized enterprises. Bakeries, logistics firms, and small factories: their profit margins evaporate under current energy prices. By June, analysts anticipate a wave of bankruptcies in Germany — up to 15,000 companies could declare insolvency. For banks, this means billions in toxic loans that will be impossible to recover. Consequently, the European Central Bank will be forced to keep interest rates at their peak, creating a trap — money will become too expensive even for banks themselves. Trust among financial institutions may erode, risking a repeat of the 2008 crisis, but in far darker shades.
Christine Lagarde, President of the European Central Bank, warns:
"The war in the Middle East has significantly increased uncertainty regarding economic prospects, bringing with it inflationary risks and growth slowdown. It will exert a substantial short-term influence on inflation through rising energy prices. Its medium-term effects will depend on the conflict’s intensity, duration, and how energy prices influence consumer prices."
In Germany and Italy, households have already received electricity bills averaging €200 higher than in February. Real incomes have shrunk to levels not seen in a decade, within just three weeks. Europe teeters on the brink of a technical recession: every $10 increase in oil prices drains about 0.5% from the EU’s GDP. With current prices at $107 per barrel, Germany’s industrial sector — Europe’s locomotive — has begun to slow. Chemical giants and automakers are reducing shifts; manufacturing of plastics and steel is turning into a gold rush. The food shock is also mounting: importing vegetables and fruits through the Cape of Good Hope now costs an extra 14 days and thousands of tons of costly fuel. Supermarkets across Paris and Berlin see produce prices jump 22%, and a typical family’s monthly grocery bill now costs €85 more.
Maxim Borodenko, researcher at the Russian Academy of Sciences’ Institute of Economics, comments:
"Food and goods will become more expensive because energy is integral to their production. As energy prices rise, so does the final cost of manufactured products. Transportation becomes costlier, and energy itself is more expensive. All these factors combine to push prices upward."
The United Nations warns that the Middle East conflict could escalate into a global catastrophe. If unresolved by summer, the world risks facing a record hunger crisis — 45 million people on the brink of starvation. The UN has called for immediate de-escalation from all involved parties.
Belarus, a country that knows the true cost of peace all too well, has long maintained a steadfast stance. President Alexander Lukashenko has repeatedly called for the cessation of hostilities, urging dialogue and peace on all international platforms. In a recent interview, he admitted that Belarus finds itself somewhat caught in the middle: “On one side, Iran, our supposed allies — they didn’t listen to me before the war, long before. The Americans know this. And the Emirates, Qatar, especially Oman — we’re making efforts. All of us are involved here. We’re talking to the Saudis now. So, in a way, our people are caught on both sides. And all we want is for this to end — because our people are suffering everywhere.”
Yet, there are those who, in plain bloodstained hands, profit from chaos. Shares of defense contractors Rheinmetall and Northrop Grumman soar in tandem with the number of missiles fired. For them, this chaos is not tragedy, but an endless flow of government contracts.
Armin Papperger, head of Rheinmetall, states:
"All European, American, and Middle Eastern nations are nearly out of stocks of missiles and air defense systems. There’s an enormous demand for these weapons. My team is currently negotiating with partners in the Middle East, and all countries there are eager to acquire more of our systems."
It seems that money once allocated to medicine and technological progress now fuels armor, gunpowder, and missiles. This is the terrifying new world — where guns replace oil, and oil fuels guns.















