Subscribe to enjoy similar stories. The war in Gaza that started on 7 October 2023 is nearly a year old and shows no signs of ending anytime soon. That the war broke out is not a surprise to veteran market watchers, its continuation is.
The seeds of the present war were sown exactly 50 years ago when war broke out on 6 October 1973 during the Jewish holy Yom Kippur period. Which is why it is also called the Yom Kippur war by historians and oil traders. That war ended on 25 October 1973.
The war had tremendous implications for the world and not just in economic terms. The politics of the Middle East and North Africa (MENA) changed forever. The present war threatens to do the same.
The 2023 war seems like Yom Kippur War-2. While lessons from history are important to learn, it should be noted that the past may rhyme with present, but it need not be a carbon copy replica. The 1973 Yom Kippur War resulted in Arab nations choking off oil supplies to the West and triggering a major spike in crude oil prices.
Many Western economies had to be admitted into the ICU (intensive care unit) of the International Monetary Fund (IMF). The US saw the then Fed chairman Paul Volcker raised interest rates to an unprecedented 20% to control inflation. But that was the past.
The current wars in Gaza and Ukraine have seen an exact opposite trend in oil prices. Oil exporting nations need petro dollars to keep their economies humming. They are eager to sell oil and gas at whatever price the buyers are ready to pay.
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