<\/p>\n
The IMF Working Paper distinguishes between actual energy shortages and geopolitical risk that creates expectations of future disruption.<\/p>\n
<\/p>\n
Researchers developed a high-frequency model to separate changes driven by current demand, expected demand, physical supply disruption and geopolitical supply risk.<\/p>\n
<\/p>\n
The analysis found that actual oil supply disruptions produced persistent increases in consumer prices and unemployment.<\/p>\n
<\/p>\n
By contrast, oil-price increases driven by fears of future shortages had short-lived effects on consumer prices and no measurable effect on unemployment. Prices generally returned to pre-shock levels within six to 12 months.<\/p>\n
<\/p>\n
A supply disruption that raised oil prices by 1% increased unemployment by about 0.03 percentage points after one year.<\/p>\n
<\/p>\n
Natural-gas shocks had more persistent effects on European consumer prices, regardless of whether prices rose because of actual shortages or geopolitical fears. However, the effect on unemployment remained limited.<\/p>\n
<\/p>\n
The researchers examined the Russia-Ukraine war, trade and production announcements in April 2025 and the 2026 Middle East war.<\/p>\n
<\/p>\n
In March 2026, the Middle East conflict effectively closed the Strait of Hormuz, trapping about 20% of global oil and liquefied natural gas consumption in the Gulf.<\/p>\n
<\/p>\n
Oil peaked at $126 a barrel before trading mainly between $90 and $110, while European liquefied natural gas prices reached almost three times the pre-war level by late September.<\/p>\n
<\/p>\n
The study found that geopolitical fears drove energy prices higher before the conflict began. After physical disruption occurred, concern about additional shortages continued placing upward pressure on prices.<\/p>\n
<\/p>\n
During the Russia-Ukraine war, geopolitical supply risk contributed more than twice as much as actual disruption to oil-price increases because physical oil losses were limited.<\/p>\n
<\/p>\n
Gas markets experienced more significant physical disruption, producing a different price pattern.<\/p>\n
<\/p>\n
The findings suggest central banks should avoid treating every energy-price increase as evidence of a physical shortage.<\/p>\n
<\/p>\n
Tightening monetary policy aggressively in response to a temporary geopolitical risk premium could unnecessarily weaken economic activity.<\/p>\n
<\/p>\n
Actual shortages may require a different response because the resulting inflation and employment effects are larger and more persistent.<\/p>\n
<\/p>\n
–IMF\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":13693,"template":"","meta":{"_acf_changed":false,"_members_access_role":[],"_members_access_error":"","_links_to":"","_links_to_target":""},"news-type":[44],"class_list":["post-47847","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"Geopolitical fears can increase oil and gas prices before supplies are disrupted, complicating decisions by central banks responding to inflation, new International Monetary Fund (IMF) research finds.","published_date":"","news_description":"Geopolitical fears can increase oil and gas prices before supplies are disrupted, complicating decisions by central banks responding to inflation, new International Monetary Fund (IMF) research finds.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/47847","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":2,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/47847\/revisions"}],"predecessor-version":[{"id":47849,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/47847\/revisions\/47849"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/13693"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=47847"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=47847"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}