Israel-Palestine War Impact on Global Economy and Human Life
The Israel-Palestine conflict, a long-running geopolitical dilemma in the Middle East has once again captured the globe's attention. On October 7, 2023, Hamas fired over 5,000 rockets from the Gaza Strip into Israel, resulting in hundreds of deaths. Israel replied by declaring the war, heightening the bloodshed. With thousands more injured the death toll has now reached 1,900.
Rise in oil prices and India's concerns
The effects of this conflict are felt throughout the world economy and not just in the region. The situation might get worse, if the war expands to other regions of the Middle East, particularly Iran, a major oil producer. Moreover, Saudi Arabia, Iraq, and the United Arab Emirates are the major oil-producing nations in the Middle East region. With daily production of about 12 million barrels, Saudi Arabia, the largest oil producer in the world, contributes 13% of the world's total oil production.
Iraq, the second-largest oil producer in the Middle East, produces around 4.27 million barrels a day. With an output of over 3.24 million barrels per day, the UAE is also a significant producer. The rise in oil prices is the most immediate effect of the conflict. Due to the rising tensions in the Middle East, which provides a third of the world's oil supply, crude oil prices have already risen to about $90 per barrel. Brent crude futures, the global benchmark, have increased by 4% to hit $89 per barrel, while U.S. crude futures have surpassed $87 per barrel.
India is the world's third-largest importer of Crude oil. Petroleum consumption is growing at a pace of 3% in India, more than the global average of 1%. With Iraq being the main supplier, accounting for 22% of India's crude oil imports, the Middle East is the country from which India buys the majority of its crude oil. The increase in crude oil prices will put a strain on India's economy. India had a robust trade relationship with Israel, exporting goods worth $3.39 billion and importing goods worth $2.3 billion, resulting in a merchandise trade surplus of $6.1 billion.
The country has made large investments in Israel, and a number of Indian businesses, such as TCS, State Bank of India, Sun Pharma, and Tech Mahindra, are well-established in the area. These businesses could be impacted by any trade interruption, which would affect the Indian economy as a whole. However, given the current situation, Indian exporters may face higher insurance premiums and shipping costs, which could affect the trade balance.
Historical data on casualties and displacement in the conflict
The Israel-Palestine conflict has a long history of claiming lives and displacing people. The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) has been tracking the fatalities related to this conflict since 2008. Till today, 7,300 Palestinians have lost their lives, and more than 1,52,560 have been injured, while 1,308 Israelis have died, and 6,307 have been injured. In 2023, over 900 Palestinian fatalities and more than 4,500 injuries have been reported, with 1000 Israeli fatalities and 3,000 injuries.
Many Palestinians have been displaced as a result of the Israel-Palestine conflict. Around 7,50,000 Palestinians were displaced during the first Palestine-Israeli war in 1948. The United Nations reported that more than 72,000 Palestinians were displaced in 2021 following an 11-day battle. The current Israel-Palestine conflict has caused more than 2,63,000 people to flee their homes.
The Global economy as well as the civilians of Israel and Palestine have been affected due to the ongoing war. This war which has caused substantial loss of life and resulted in displacement of the population highlights how necessary it is to find a peaceful solution to this situation.