One god, many wars: religious dimensions of armed conflict in the middle east and north africa9/20/2023 ![]() So traders and investors are betting as much on repeated patterns of behaviour rather than on amateur geopolitical reasoning.įor decades, the energy price impact has been the main transmission mechanism from major conflicts - particularly in the Gulf - to the wider economy and world markets. And beyond the Gulf, years of North Korean nuclear tests and missile launches have not yet escalated nor affected international investment patterns for any significant length of time. Regionally-contained military blowups and bursts of conflict have proven in recent years not to have a durable impact on either oil supplies and prices nor global economic activity.Įven September’s attacks on Saudi oil installations had no lasting effect on crude prices. INX rallied to new record highs.Īt its most basic level, investors appear to believe that Tehran and Washington will avert a broader conflagration. And even then, some begin to wonder.īy the European close on Wednesday, Brent crude oil prices had returned back below levels seen before Soleimani's death on Friday and Wall Street's S&P500 equity index. Welcome to the brave new world where it appears that little short of full-fledged world war between nuclear-armed powers would be required to have a durable impact on financial markets. And that mirrored a super-fast roundtrip on markets after Iran-backed rebels attacked Saudi oil facilities in September. killing of top Iranian commander Qassem Soleimani on Friday. ![]() ![]() It was the second volte face in under a week following a similar pattern of events after the U.S. REUTERS/Brendan McDermidīut it took just hours for that safe-haven dash to fade and for world equities to resume their climb. FILE PHOTO: A trader looks at a screen at the New York Stock Exchange (NYSE) in New York, U.S., October 25, 2019. ![]()
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