The conflict in the Middle East has triggered a severe global economic crisis, with oil prices surging 50 percent to over $100 a barrel since the US and Israel launched strikes on Iran. Financial markets initially dismissed the conflict as temporary, but four weeks of hostilities have exposed the vulnerability of the Strait of Hormuz, through which a fifth of the world's oil and liquefied natural gas flows.

Energy markets face unprecedented disruption as Qatari officials report years-long damage to the Ras Laffan LNG plant, the world's largest, from Iranian retaliatory attacks. Gas prices have spiked across Europe and Asia, while the blockage of fertilizer, helium, and sulphur supplies threatens industries from chipmaking to agriculture. Analysts warn oil could exceed $150 a barrel, a level that would significantly raise recession risks worldwide.

The crisis creates a policy dilemma for central banks, with the Federal Reserve, European Central Bank, and Bank of England maintaining interest rates as they assess the conflict's impact. European nations, having replaced Russian energy dependence with Middle Eastern supplies, face particular vulnerability with limited fiscal buffers. The longer the conflict persists, the more severe the shortages, price spikes, and supply chain disruptions will become.