Will the same causes produce the same effects? In other words, will the war in Iran and the resulting surge in oil and gas prices lead to an inflationary shock comparable to that seen in 2022? Will their negative effects on growth be the same as those for the war in Ukraine and the subsequent energy shock? Although there are similarities, there are many uncertainties.
The ongoing energy-led inflation rise should be less strong, as demand is less dynamic and supply is less constrained today compared with the situation in 2022. Conditions do not appear to be conducive to a significant propagation of the rise in energy prices.
The data available to date supports this view, but the situation still needs to be monitored closely. The Memorandum of Understanding (MoU) between the United States and Iran provides some relief but many uncertainties remain. The recent fall in oil prices is good news, but it must continue over the long term. Nevertheless, it is a headwind that is easing, which reinforces our scenario of global growth resilience. Inflation is expected, however, to remain supported for some time by the lagged effects of tensions on oil and other commodity prices and on value chains. The context remains inflationary, albeit to a lesser extent than before the MoU, but enough to justify a more restrictive stance from central banks.
We have selected a set of indicators to track the impact of this new energy shock — caused by the war in the Middle East — on activity and prices in the Eurozone, the United States, oil and gas markets and emerging countries, and to see how much the current situation resembles that of 2022 at the outbreak of the conflict in Ukraine.
This dashboard is featuring charts and comments will be updated on a monthly basis for as long as necessary.
