Abdullah Dardari, the UN Assistant Secretary-General and Director of the Regional Office for Arab States, warned that military escalation in the Middle East could cost the Arab region up to $194 billion. In a special interview with "Asharq Al-Awsat," Dardari emphasized that these figures reflect a sharp and unexpected economic shock, warning that the continuation of fighting will lead to a rapid and cumulative worsening of economic and social damages.
Dardari pointed out that the social situation is deteriorating, with unemployment rates expected to rise by about 4 percentage points, which translates to a loss of 3.6 million jobs in the region. He also warned that nearly 4 million people are at risk of slipping into poverty within just one month.
Details of the Situation
In light of these conditions, the European Commission urged EU member states to take immediate action to reduce domestic fuel demand, given the significant increases in energy prices resulting from the war in the Middle East. European Energy Commissioner, Dan Jørgensen, stated that the current situation is likely to worsen, stressing that reducing demand has become an urgent necessity.
Jørgensen said, "There is no one-size-fits-all solution, but it is clear that the more oil we can supply, especially diesel and jet fuel, the better our situation will be." He called on national governments to place energy conservation at the heart of their plans to address the crisis, warning that the continuation of the conflict could present the continent with unprecedented challenges in securing supplies.
Background & Context
These statements come at a time when global markets are experiencing severe disruptions in oil supply chains, prompting Brussels to seek urgent alternatives and reduce consumption to avoid a scenario of total disruption in the transport and industrial sectors. In Jordan, the Oil Derivatives Pricing Committee decided to raise fuel prices starting in April by rates of up to 15 percent, clarifying that this increase does not reflect the true costs of global prices.
In Brazil, the "Abra" group announced that the Brazilian oil company "Petrobras" will implement a sharp increase in jet fuel prices by up to 55 percent, placing immense pressure on the country's aviation industry.
Impact & Consequences
Estimates indicate that these increases in fuel prices will lead to a rise in ticket prices by 10 percent for every dollar increase in the price of a gallon of fuel. The airline company "Azul" announced that it has already raised the average prices of its booked flights by more than 20 percent, reflecting the direct impact of rising fuel prices on the aviation sector.
In Jordan, the government confirmed that it will gradually absorb the differences resulting from this decision until global prices stabilize, having incurred direct energy and electricity costs of 150 million dinars during the first month of the crisis.
Regional Significance
Concerns are growing that these conditions could exacerbate economic and social crises in the Arab region, where many countries are facing increasing economic challenges. The rising rates of unemployment and poverty could lead to social instability, necessitating a swift response from governments and the international community.
In conclusion, it appears that military escalation in the Middle East is not only affecting the directly involved countries but also extending its impact to the global economy, calling for urgent measures to mitigate the negative effects on communities.