List of Goods Likely to Rise in Price Due to Iran vs Israel-US Conflict
Jakarta – Escalating tensions between Iran and Israel, with the involvement of the United States, are triggering significant concerns across global markets. Military strikes and threats to disrupt strategic energy routes such as the Strait of Hormuz are prompting investors and business operators to prepare for potential spikes in the prices of various commodities.
The Strait of Hormuz is a vital waterway through which approximately 20 per cent of global oil and gas supplies pass. Should distribution be disrupted for an extended period, the impact could ripple across numerous sectors, ranging from energy to daily necessities.
Below is a list of goods that could experience price increases should the conflict continue to escalate:
- Fuel and Petroleum Products
Global crude oil prices typically react first to tensions in the Middle East. Rising oil prices have the potential to drive up petrol, diesel, and aviation fuel prices. If global oil prices surge sharply, the costs of transportation and goods distribution will also increase accordingly. In a prolonged conflict scenario, fuel prices across various countries could experience significant adjustments.
- Liquefied Petroleum Gas and Household Gas
Beyond fuel, household gas prices also have the potential to rise. Disruptions to global energy supply could increase gas import costs, particularly for nations dependent on foreign supplies. Price increases in liquefied petroleum gas will directly impact household expenditure and small business operators such as restaurants and micro, small and medium enterprises.
- Gold and Precious Metals
When geopolitical situations heat up, investors typically seek safe-haven assets such as gold. Increased demand could push global gold prices higher. This increase does not only affect bullion prices but also jewellery and other precious metals such as silver, platinum, and palladium.
- Fertilisers and Agricultural Products
The conflict in the Gulf region also has the potential to disrupt fertiliser distribution, given that certain raw materials and shipping routes pass through this strategic area. If fertiliser prices rise, agricultural production costs will increase and could impact food prices at the consumer level.
- Food Products
Rising energy costs typically spread to the food sector. Transportation, processing, and storage costs become more expensive when fuel prices increase.