Israel-Palestine War- Impact on the Various Sectors 

Why did the War Start?

The Israel-Palestine conflict began in the late 19th century when Jewish Zionists sought a homeland. Recently,  the Palestinian armed group Hamas launched a war against Israel in the most serious escalation. The repercussions were felt all over the world.

Impact on Oil Sector

The Middle East turmoil has immediately impacted the oil market, which has surged nearly 5% since the war declaration.  As a result, transportation and production costs will increase, which can lead to higher prices for goods and services across the economy, which may drive inflation.

Impact on Paint Sector

Paint companies rely on crude oil as key ingredients in their paint production, and soaring input prices could negatively impact their profitability. Due to this war, the paint sector is directly impacted as their cost of production increases.

Impact on Shipping and Port Sector

The Israel-Hamas conflict could raise insurance costs and shipping expenses. India’s Export Credit Guarantee Corporation (ECGC) may charge higher risk fees for shipments to Israel. If Israeli ports like Haifa, Ashdod, and Eilat face operational issues, short-term disruptions may occur.

Impact on Gold Sector

Gold is often considered a safe-haven asset during geopolitical turmoil, economic uncertainty, or financial market instability. The Israel-Hamas conflict might raise gold prices if interest rates remain low, as lower rates make storing gold more affordable to investors.

Learn more from our course on Macroeconomics Made Easy to understand how will it impact our economy.