Middle East: Concerns about the Greek and global economy "under the shadow" of the escalation of tensions

Markets, commodities, supply chain, inflation, transportation costs are the main problems that could cause a generalized conflict in the Middle East.

Oil
Brent crude oil prices are trading at $90 on Monday morning and there is strong concern among analysts that they could reach or even exceed 100 euros if tensions in the Middle East escalate.

Possible lower Iranian exports could lead to further increases in oil and gasoline prices.

The situation is fluid and if Israel decides not to retaliate, the tensions in the market will ease, many analysts estimate.

Concerns within Greece about fuel prices
In Greece, as the Deputy Minister of National Economy and Finance Haris Theocharis announced on Sunday, "it is obvious that this period, when there is turmoil, is the period when all the mechanisms must be alert. Either they are related to profiteering or they are related to tax evasion. In the coming days, teams of AADE and DIMEA will be on the streets to carry out checks".

Shipping
Another factor of concern is the impact on shipping through the Strait of Hormuz, through which about a fifth of the volume of total global oil consumption passes daily, Reuters news agency noted.

"Crude prices already included a risk premium, and the extent to which it widens further depends almost entirely on developments near Iran around the Strait of Hormuz," the analysts point out.

"The most feared scenario is the closure of the Strait of Hormuz," said Global Risk Management's Rasmussen. "I don't think Iran will close the strait, but the risks are increasing," he noted.

Inflation
At a time when almost all governments and central banks on the planet are trying to deal with inflation, a possible flare-up of conflicts in the Middle East could further lengthen the delivery of goods, raising the final cost that consumers will have to pay on the shelves.

Besides, there is still the open front with the Houthis in the Red Sea that has caused increases in freight rates and continues to plague the global economy.

A possible escalation of tensions is extremely likely to bring increases in international airfares due to fuel price increases, flight cancellations and rerouting that will increase the time and therefore the cost of flights.

Energy bills
An additional problem could be added to energy bills if natural gas prices rise even higher following Iran's attack on Israel and with the possibility of a response from Israel remaining extremely likely.

On Monday, natural gas prices are trading above 30 euros per megawatt hour - with the rise reaching close to 5% at some point in the morning, returning to winter levels. It should be noted that in February and March the prices had de-escalated and had reached pre-energy crisis levels, at 22 euros.

International markets and central banks
History has shown that during times of turmoil, stock markets are particularly sensitive with ups and downs in stock prices being a common occurrence.

Financial markets will face the new week worried about geopolitics, with much interest in whether Iran's unprecedented strike on Israel over the weekend triggers rounds of retaliation.

With investors already reeling from stagnant inflation and the prospect of interest rates remaining higher for longer, the escalating crisis in the Middle East could cause fresh volatility in markets if the conflicts escalate.

In the case of further escalation, the domino of developments will also include the central banks and especially the Fed. Stagnant inflation in the US is raising concerns about whether the Federal Reserve is ready to cut interest rates.

Also, the ECB may have discounted the first interest rate cut in June, however no one can guarantee the stance it will take in the eventuality that the situation in the Middle East escalates, taking into account that the high is receding but has not yet become the past.

Asian markets fell on Monday as investors weighed the impact of Iran's massive drone and missile attacks on Israel over the weekend.

On the contrary, the European markets markets with the exception of London, opened with a positive sign.

Athens Stock Exchange
The Greek stock market opened with a "plunge" of more than 1%, in the wake of developments in the Middle East, to widen the losses to -1.30% at 13:00, due to the "nervousness" prevailing in the markets.

The markets as a whole are moving cautiously and analysts are waiting for Wall Street to be able to draw more secure conclusions.