What is the current situation like?

The current escalation must be seen in relation to the Hamas terrorist attack on Israel on October 7, 2023, which caused severe traumatization of Israeli society. In addition to Hamas, Israel also suspects Iran of being the direct mastermind.

In addition to the offensive in the Gaza Strip, more and more attacks are being carried out in places where representatives of the Iranian security organs are suspected, such as Lebanon, Syria, Iraq and Yemen. Two weeks ago, Israel killed several top Iranian generals in an attack in Syria. In response, Iran fired drones and missiles directly at Israeli territory for the first time over the weekend. Although these could be largely eliminated through air defense, this does not change the fact that there will be greater military disinhibition.

Sebastian Hell has been a successful entrepreneur in the German financial sector since 2005. In 2019 he founded the “Hell Investiert” project, which now has more than 100,000 followers on social media. The focus is on investing through tangible assets (stocks, real estate and precious metals) to achieve both profitability and capital protection. His free weekly report offers interesting tips and ideas.

What scenario is likely?

We are in a dangerous situation. In his view, neither side can leave the other side's escalation unanswered for fear of showing weakness. Furthermore, reactions so far show that neither side is interested in a major direct military conflict.

However, there is a risk of errors in judgment, leading to further conflict. The United States considers itself Israel's protective power. Therefore, an attack against Israel is always an indirect attack against the United States itself. Iran, in turn, has become one of Russia's most important arms suppliers to Ukraine and can sometimes count on its support. A regional conflict can quickly become a global conflagration.

What impact does this conflict have on the price of oil?

So far we have seen relatively little movement in the price of oil and only a slight increase. This means that investors consider the risk of a major escalation low. However, Iran could exert influence here.

Almost a fifth of the world's oil is transported through the Strait of Hormuz, between Iran and the Arabian Peninsula. Iran could militarily close this highway with relative ease, which in turn would make intervention by Western states more likely.

Oil production facilities in countries such as Saudi Arabia, the United Arab Emirates or Kuwait could also be attacked. All this would cause a sharp increase in the price of oil, which people in Europe would also feel at the pump.

What did that mean for inflation?

An unforeseen escalation with a sharp increase in the price of oil would once again stimulate inflation in Europe and the United States. Central banks would then be forced to keep interest rates high or, if necessary, raise them further. This would place an additional burden on companies or individuals with negative consequences for the economy.

Frequently asked questions about this topic

What are the reasons for the ban on LNG export permits in the US?

A week ago, US President Joe Biden stopped issuing new export permits for the shipment of LNG. It is liquefied gas, which has been used in important areas of the…

Sebastian Hell

He deals with finances and investments every day. In 2019, the “hell-invested” project began.

How does the ban on LNG export permits in the US affect gas prices in Germany?

So far, the TTF price of natural gas, relevant for German consumers, has not changed significantly. This is because winter is becoming milder and gas stores are very well full, at 75 percent. However, the United States until now has been a…

Sebastian Hell

He deals with finances and investments every day. In 2019, the “hell-invested” project began.

At what level are gas prices in Germany currently and how have they evolved in recent months?

Currently, gas prices on the Dutch benchmark exchange have fallen to their lowest value since May 2021. The megawatt hour is currently trading at less than 30 euros. At the height of the gas crisis in August 2022…

Sebastian Hell

He deals with finances and investments every day. In 2019, the “hell-invested” project began.

What additional costs may German consumers have due to the increase in gas prices?

Discussions emerging about the lack of deliveries in the United States could lead to price increases starting in the summer. Depending on how high gas storage levels are in Germany, this is what the first forecasts for winter will look like…

Sebastian Hell

He deals with finances and investments every day. In 2019, the “hell-invested” project began.