What did Hamas hope to achieve by its attack on Israel of October 7? The answer was surely to set the region aflame. More narrowly, it was to provoke the response we see, with inevitable consequences for Israel’s global reputation and the prospects for peace in the region. The strategy, in other words, is to make martyrs of the people of Gaza in a greater cause. Alas, it is working.
The World Bank also notes that past energy shocks have been significantly costly. Iraq’s invasion of Kuwait in 1990 raised average oil prices three months afterwards by 105 per cent, the Arab oil embargo of 1973-74 raised them by 52 per cent and the Iranian revolution of 1978 raised them by 48 per cent. So far, however, the effects on oil prices of the Hamas attacks on Israel and the war in Gaza have been modest. In real terms, oil prices in September were close to their mean since 1970.