Economists and analysts are predicting new ripple effects that will be felt around the world from the conflict in the Middle East, and are waiting to see if the situation will spread to other countries as well, potentially accelerating the rise in oil prices and the flight of people. capital to assets. shelter, reports Reuters.

Israel is preparing to launch a ground attack on Gaza after telling Palestinians living in the territory to go south. At the same time, Israel’s national security adviser warned the Hezbollah group not to open a new front in the fight against Israel in Lebanon, Agerpres reports.

“It appears we are heading for a massive ground invasion of Gaza with heavy casualties. Anytime you have a conflict of this magnitude, you’re going to have a market reaction,” said Ben Cahill, a senior fellow at the Center for Strategic and International Studies (CSIS) in Washington.

Concerns about conflict in the Middle East weighed on asset prices last week, pushing stocks lower, with the S&P 500 losing 0.5%.

Instead, safe-haven assets began buying heavily, with gold up more than 3% on Friday and the US dollar climbing to its highest level in a week.

Oil also rose nearly 6 percent on Friday as investors assessed what the conflict in Israel could mean for supplies from neighboring countries that make up the world’s biggest oil-producing region.

The price of oil will rise if the conflict widens

“If the conflict becomes large-scale, the price of oil will continue to rise,” said Michael Englund, chief economist at Action Economics LLC in Boulder, Colorado.

An extended conflict could also raise inflation and, as a result, accelerate the rise of interest rates around the world, said Bernard Baumol, global economist at The Economic Outlook Group in Princeton, New Jersey. However, while inflation and interest rates elsewhere may rise, the U.S. may be an exception to this pessimistic scenario as foreign investors shift their capital to areas they consider safe during global conflict, Baumol added.

“Interest rates may decrease. Expect the dollar to strengthen,” says Baumol.

Other fuels can also be affected by conflict in the Middle East, as happened recently when oil group Chevron stopped exporting natural gas through a large underwater pipeline connecting Israel and Egypt.

“The main risk for the oil market is that neighboring countries are involved in this conflict,” says Ben Cahill.

However, analysts believe that higher oil prices are unlikely to have a significant impact on gasoline prices or U.S. consumer spending.

“It is unlikely that the consumer will see a significant impact on US gasoline prices in the near term,” says Michael Englund.