Publications

The ECB is addressing the supply shock stemming from the conflict in the Middle East by using economic scenarios. The institution is taking a watchful stance toward inflation risks and the persistence of energy prices to avoid second-round effects on the economy.

The quote “it is difficult to make predictions, especially about the future” is attributed to Niels Bohr. Today, it is even more so in an environment of high uncertainty. The increase in costs caused by the war between the U.S. and Israel against Iran will have negative effects on the Spanish economy.

The recent military escalation in the Middle East represents a new energy crisis for the global economy. Although higher resource prices will put upward pressure on inflation, for now, a temporary slowdown rather than a deep global recession is expected.

Geopolitical crises do not automatically trigger energy transitions. They accelerate diversification only when economically viable and scalable substitutes already exist. Price spikes alone are insufficient; transition dynamics are shaped by shifts in perceived supply risk, technological readiness, and policy responses.

The new administration's announcements in the United States on trade policy have led to significant alterations in global production and value chains. One reflection of these variations was the performance of commodity markets.

Oil prices have experienced high volatility this year. Lower global demand and increased supply from OPEC+ have driven a bearish trend, which was recently interrupted by tensions between Israel and Iran. The outlook remains uncertain, especially concerning a potential blockade of the Strait of Hormuz.

The average price for 2024 has been very close to $80 per barrel of Brent, although with a downward trend throughout the year, largely due to more subdued economic activity in China and the gradual increase in supply from the main producers in the Americas.