(Sumber Foto: Sbs.com.au)
Oleh: Arie Kusuma Paksi, Ph.D. (Dosen Hubungan Internasional UMY dan Pengamat Ekonomi Internasional)
The Israel-Palestine conflict, known for its deep historical roots and recurring escalations, stands as a stark reminder of the complex link between regional conflicts and global trade dynamics. This enduring struggle has recently intensified, bringing to the forefront its potential to disrupt critical trade routes and global markets, particularly affecting the oil and gas sectors which are pivotal to global economic stability. The recent attacks by Yemen’s Houthi group, targeting ships headed towards Israeli ports in solidarity with Palestinians, exemplify the conflict’s capacity to affect global trade. These disruptions have immediate consequences on maritime trade, with some of the largest shipping companies in the world being forced to reroute at considerable costs, reflecting broader regional discontent and geopolitical tensions (Motamedi, 2023).
Critical maritime routes like the Red Sea and the Suez Canal, which facilitate a significant portion of global trade, become particularly vulnerable during such conflicts. The strategic location of these routes, connecting East and West, means any instability can have far-reaching economic repercussions. The Suez Canal alone saw daily traffic of around 50 ships per day in 2020, indicating the massive impact any disruption could have on global trade. The rerouting of ships due to the conflict not only increases transit times but also leads to heightened shipping costs, impacting global supply chains and trade operations (Rovnick et al., 2023).
In the realm of energy markets, the Middle East’s strategic importance as a major oil supplier makes the Israel-Palestine conflict a critical concern. An escalation in the region often leads to spikes in oil prices due to fears of supply disruption. For instance, Brent crude futures saw a significant surge, nearing $89 per barrel following recent escalations. Such increases have a cascading effect on global markets, pushing up inflation and causing economic instability (Nadig, 2023). This is particularly concerning for economies like Europe, where the conflict poses risks of lower trade, tighter financial conditions, and lower consumer confidence. Goldman Sachs noted that even a persistent 10% increase in oil prices could reduce Euro area real GDP by about 0.2% after one year (Smith, 2023a). Emerging markets, with their greater vulnerability to energy price shocks and larger share of energy in their consumer price index, face even more pronounced economic peril (Smith, 2023b).
The international response to the conflict, including coalition efforts and diplomatic initiatives, is crucial in mitigating its impact on global trade. However, the recent shifts in geopolitical alliances and the trend toward ‘deglobalization’ complicate these efforts. The conflict’s potential to accelerate global realignment poses additional challenges to maintaining stable trade relations and economic growth (Bianchi, 2023). The future trajectory of the Israel-Palestine conflict and its impact on global trade will largely depend on the duration of the conflict and the effectiveness of international response measures. Policymakers and international bodies must focus on strategies to mitigate these impacts, promote regional stability, and maintain open and secure trade routes.
In conclusion, the Israel-Palestine conflict, far beyond its regional origins, has profound implications for global trade, particularly in the critical domains of energy security and supply chain stability. Understanding and addressing the conflict’s impact on global trade is crucial for maintaining global economic stability and ensuring the smooth functioning of international markets.
References
Motamedi, M. (2023). “Are Houthi Red Sea attacks hurting Israel and disrupting global trade?” Al Jazeera.
Rovnick, N., Mackenzie, N., & Jones, M. (2023). “How Israel-Gaza war could impact global markets.” Reuters.
Nadig, S. (2023). “What are the implications of Israel-Palestine war on the global oil and gas markets?” Offshore Technology.
Smith, E. (2023a). “Goldman Sachs says the Israel-Hamas war could have major implications for Europe’s economy.” CNBC.
Smith, E. (2023b). “Economists fear major disruption if the Israel-Hamas conflict is not contained.” CNBC.
Bianchi, D. (2023). “How the Israel-Hamas war could affect the world economy and worsen global trade tensions.” The Conversation.