Israel-Hamas conflict: Impacts on World Economy

Abstract

The focus of this article is on the economic consequences of the Israel-Hamas conflict, which include trade disruptions, energy price fluctuations, and regional turmoil. Besides destabilizing the Middle East, conflict that escalated in 2023 has had major adverse effects on global markets. Due to the strategic location of Gaza and Israel’s economic significance, the conflict has become a major factor in disrupting international trade. It is a mixed-method study of trade data, commodity prices, expert interviews, and qualitative evidence from geopolitics to identify direct and indirect effects on the economy. Rising global oil prices, trade disruptions, a decrease in foreign investments in the Middle East, inflation, and changes in global supply chains are all signs of instability. As a solution to these problems, the paper suggests that diplomatic efforts should be directed toward ending long-term peace and tension reduction while encouraging demand for energy supply and diversification across borders and industries. Additionally, building up international collaboration and investing in renewable energy can provide economic stability against ongoing geopolitical instability.