The New York Times: Oil prices could hit record highs

A report by Alan Rappeport in The New York Times suggests that oil and gold prices could hit record highs due to the ongoing tension in the Middle East. According to the report, economists are trying to determine the potential scale of the economic repercussions if the war between Israel and Palestine intensifies and spreads across the Middle East.

Indermit Gill, the World Bank's chief economist and senior vice president for development economics, said in a statement accompanying the report, "The latest conflict in the Middle East comes on the heels of the biggest shock to commodity markets since the 1970s, Russia's war with Ukraine."

The World Bank projects that global oil prices, which are currently hovering around $85 per barrel, will average $90 per barrel this quarter. Although the institution expects prices to fall next year, disruptions in oil supply could significantly alter these forecasts.

The bank's worst-case scenario is based on the 1973 Arab oil embargo that occurred during the Arab-Israeli war. A disruption of that magnitude could remove 8 million barrels of oil per day from the market and push prices as high as $157 per barrel. Officials stated that if high oil prices persist, it would lead to increases in the prices of food, industrial metals, and gold.