Coming after successive shocks from the coronavirus pandemic, Donald Trump’s tariffs and the retreat from globalisation sparked by Russia’s invasion of Ukraine, the Iran war looks uncomfortably like the stuff of nightmares.
Yet the response in the oil market to serious supply disruption has been muted. Even after its initial rise the oil price was standing midweek at only two thirds of the peak level of $128 seen in 2022. Meantime the wider inflation scare in the markets has fallen well short of panic. The question is, are investors wilfully complacent about the looming threat of stagflation?
Granted, the uncertainties are legion. But the answer is still a blunt yes because this latest supply shock to the global economy differs in two important and worrying respects from all those experienced since 1945.