World Bank Warns: Israel-Gaza Conflict Could Spike Oil Prices by 75%
The World Bank has issued a stark warning: a regional escalation of Israel's war on Gaza could trigger a massive surge in oil prices, potentially reaching up to 75%. Meanwhile, the Ukraine war has sparked a push for expanded oil and gas extraction, but also accelerated Europe's shift towards renewables.
The U.S. and U.K. launched airstrikes against the Houthis in Yemen on January 12, targeting military equipment used for attacks on vessels in the Red Sea. This action has led to a 1% rise in oil prices and increased shipping costs. A growing number of oil tankers are now avoiding the Red Sea, extending their voyages by over a week. The airstrikes resulted in at least five deaths, with the Houthis vowing retaliation.
The burning of fossil fuels has pushed 2023 to become the hottest year on record. Scientists warn that the global economy can only continue burning oil, gas, and coal at current levels for six more years to limit warming to 1.5 degrees Celsius above pre-industrial levels.
The Houthis claim they are only targeting Israeli ships or ships bound for Israel until Israel stops its bombardment and invasion of Gaza and allows for humanitarian aid. Climate groups and activists, including Greta Thunberg, have expressed solidarity with Palestine and joined the call for a ceasefire in Gaza. Scholars and activists are increasingly highlighting how oil and gas interests fuel conflicts and perpetuate war.
The Houthis' continued maritime attacks and Qatar's pause of LNG shipments through the Suez Canal have led the entire global LNG fleet to abandon the route, potentially raising global LNG prices.
The U.S. government announced a 21-point peace plan for the Gaza Strip conflict on January 12, aiming to end fighting between Israel and Hamas. This comes amid ongoing tensions, including drone attacks in the Red Sea region. As the world grapples with both conflict and climate change, the interconnected nature of these crises is becoming increasingly clear.
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