Oil markets, geopolitics, macroeconomy and US elections

Iran's missile strike against Israel over the weekend – in response to an attack on its embassy in Damascus – marks a significant escalation in geopolitical tensions in the Middle East. The unprecedented attack originating from Iranian territory on Israeli soil could threaten oil supplies from Iran if Prime Minister Benjamin Netanyahu approves a counteroffensive, and, in the worst case scenario, could disrupt tradeflows along the immensely vital Strait of Hormuz. Elevated energy prices for a sustained period may end up derailing the efforts made by the Federal Reserve and central banks around the world in trying to tame inflation, with higher readings creating headwinds in an election year for President Joe Biden as he campaigns for a second term in office. In our April edition of REview, Claudio Galimberti and Manash Goswami discuss the latest escalation, its impact on geopolitics and the economy, along with the outlook for oil markets.