Rising Oil Prices and Recession Fears Amid Fragile Ceasefire

Crude oil prices have surged again following reports that a ceasefire announced by US President Donald Trump and Iran is showing signs of instability. This potential escalation raises concerns about a global recession driven by an oil shock. In this analysis, Ilian Mihov, Professor of Economics at INSEAD, discusses the economic implications of the conflict. He highlights that supply shortages resulting from the war may impact global economic activity more severely than price increases alone. Furthermore, Mihov outlines the complex decisions central banks face in balancing inflation control with economic stability amidst these geopolitical tensions. The situation underscores the delicate interplay between international security developments and macroeconomic forecasting.