US Treasury Secretary Janet Yellen said the US could “certainly” provide military aid to Israel in its war against Hamas and Ukraine in its war against Russia. In statements to Britain’s Sky News network on Monday, he said: “The United States can certainly stand by Israel and support Israel’s military needs, and we should support Ukraine in its fight against Russia.

Yellen reiterated US support for Israel while calling for vigilance to avoid civilian casualties as Israeli forces prepare for a major counteroffensive in the Gaza Strip.

Yellen said: “We are working very closely with the Israelis who have the right to defend themselves, but it is very important to try to save the lives of innocent civilians.” He insisted that the United States “fund both Israel and Ukraine.”

In an interview with 60 Minutes, President Joe Biden rejected the idea that Israel could not be supported in its war against Hamas and Ukraine at the same time. He said both conflicts would affect the security of the American people, and stressed that the United States “can take care of these two conflicts and continue to maintain our comprehensive national security.”

Worrying economic implications

Economic fears have begun to mount, along with political fears that the war in Israel will escalate and intervention by regional parties will expand the scope of the conflict, as well as concerns about large human losses and infrastructure destruction. Severe recession on economies and significant rise in oil prices.

Amidst the ongoing war between Russia and Ukraine, which has negatively affected the global economy, the uncertainty imposed by the war between Israel and Hamas and the region’s geopolitical concerns are adding to global markets’ worries about economic recession and upheaval. Inflation, decline in global economic activity and resort to more stringent monetary policies will lead to higher interest rates across all central banks around the world.

Analysts say that Israel is not an oil producer, so the war will not have a direct impact on oil markets, but the more pressing concern is the human losses and the fact that prolonging the war will have a profound impact on, and weaken, the global economy. The US economy’s ambitions are to avoid entering a recession.

High oil prices

Experts at Bloomberg Economics said fears of a wider regional war and Iran’s involvement in a direct conflict with Israel are making markets more anxious because of the possibility of the United States becoming directly involved in the conflict. If this happens, the price of oil will rise to $150 per barrel, compared to the current price of $90.

Analysts point out that 20 to 30 percent of oil supplies pass through the Iranian-controlled Strait of Hormuz, and that if Iran goes to war, it will face pressure from the United States and the West and severe sanctions on Iran. This would prompt Iran to close the strait, disrupting global oil supplies and driving up prices.

Recreating the scene of the October 1973 battle

As experts Bloomberg reports, Iran’s intervention in the conflict will have a severe impact on oil prices, which will rise dramatically from the October 1973 war fifty years ago, causing markets to call it the “oil shock.” After it was imposed, Arab countries imposed an oil embargo in retaliation for US support for Israel.

Higher oil prices could lead to a reduction in global GDP growth from 3 percent to 1.7 percent in 2023, a trillion-dollar reduction in global output, the report said.

Higher oil prices will push inflation rates back up in the U.S., which will directly affect gas, commodity and service prices, and shipping costs, affecting supply chains and leading to higher prices.

Experts say rising inflation has hampered all efforts by the Federal Reserve over the past two years, especially as rising tensions in the Middle East keep inflation rates high for a long time.