THE IRAN/ISRAEL WAR: CAN OIL PRICES SOAR TO 150 DOLLARS?
The specter of an open conflict between Iran and Israel continues to fuel discussions on the international stage. Amid escalating tensions, this standoff could drive oil prices to a level we haven’t seen in a long time. Imagine a barrel at 150 dollars — is it possible? In this article, I will explore the implications of such a scenario and what strategies to adopt to protect our economy from its impact.
CONTEXT OF THE OIL SURGE
At the heart of Middle Eastern instability, Israeli strikes on Iranian sites have raised the geopolitical risk premium in the oil market. In just one day, the Brent crude price surged by 8 to 13%, reaching approximately 75 dollars per barrel. This situation not only raises concerns about oil prices but also about global energy security. Oil market fluctuations [https://www.dbfranceinvest.com/wp-content/uploads/2025/06/petrole.png].
KEY FIGURES AND PROJECTIONS
* The Brent barrel could rise from 75 to 150 dollars by 2026, according to JPMorgan.
* A closure of the Strait of Hormuz, which sees 20% of world oil transit, could intensify this increase.
* Gasoline prices in France could reach 2 euros per liter.
POTENTIAL CONSEQUENCES OF AN OIL CRISIS
Such a price surge would put additional pressure on household purchasing power and on business production costs [https://www.dbfranceinvest.com/2025/07/02/la-gestion-de-la-tresorerie-et-les-besoins-en-fonds-de-roulement-bfr-pour-de-nombreuses-entreprises-la-gestion-du-bfr-est-cruciale-les-articles-qui-expliquent-comment-optimiser-sa-tresorerie-ob/]. The inflation in oil prices [https://www.dbfranceinvest.com/2025/06/20/lenvironnement-macroeconomique-inflation-taux-dinteret-recession-linflation-reste-une-preoccupation-majeure-avec-des-discussions-continues-sur-son-impact-sur-le-pouvoir-dachat-et-les-st/] would inevitably affect all economic sectors and could even trigger a recession if a swift resolution to the conflict is not found.
SOLUTIONS TO PROTECT AGAINST OIL PRICE INFLATION
* Energy source diversification: Accelerate the transition to renewable energies such as solar and wind.
* Sustainable mobility: Enhance energy efficiency by developing public transport and electric vehicles.
* Strategic storage: Build oil reserves to anticipate shortages.
* Targeted subsidies: Provide financial aid to households [https://www.dbfranceinvest.com/2025/06/15/le-guide-ultime-du-financement-dentreprise-en-2025-de-la-subvention-a-la-levee-de-fonds/] most affected by the price increase.
As tensions in the Middle East persist, it is crucial to prepare our economies to face a possible rise in oil prices. By diversifying our energy sources and promoting sustainable consumption practices, we can mitigate the impact of this energy inflation. The key lies in our ability to anticipate and adapt quickly to preserve our energy security. Share your ideas and opinions below. Subscribe to our newsletter to receive our latest articles on energy strategy.
RISKS ASSOCIATED WITH BUSINESS FINANCING
Businesses, whether small or large, face similar risks and others that are more specific when seeking financing.
1. Insolvency risk (or default risk)
Just like individuals, this is the main risk. The business can no longer meet its debts. The causes can be manifold:
* Decline in turnover: A decrease in sales can limit the company’s ability to generate profits and repay its debts.
* Cost increase: Rising raw material prices, wages, or energy can erode profitability.
* Poor management: Inefficient management of inventories, client receivables, or expenses can lead to cash flow problems.
* Increased competition: The arrival of new competitors or disruptive innovation can affect the company’s market position.
* Economic crisis: A recession can reduce overall demand and impact the company’s activity.
The consequences are severe: bankruptcy filing, judicial liquidation, job losses, tarnished image for the company and its leaders.
2. Interest rate risk
* Rate increase: Similar to individuals, a rise in interest rates on a variable-rate loan can increase financial charges for the company, reducing its profitability.
3. Liquidity risk
* This risk is crucial for businesses.
* Cash shortfall: The company might be profitable on paper but lacks enough cash to pay suppliers, employees, or short-term debts. This can be due to protracted client payment terms, inventory buildup, or a significant investment tying up funds.
* Difficulty in securing new financing: In challenging times, banks may become more hesitant to lend, worsening liquidity problems.
4. Market risk (or economic risk)
* This risk relates to the environment in which the company operates.
* Demand change: Consumer preferences evolve, technologies change, potentially rendering the company’s products or services obsolete.
* Raw material price fluctuations: For a manufacturing company, a significant increase in input prices can erode margins.
* Currency fluctuation: For businesses that import or export, exchange rate variations can affect costs or revenues.
5. Operational risk
* This is the risk that internal errors or unforeseen events impact the company’s ability to generate revenue or manage costs.
* Technical breakdowns: Major IT failure, production issues.
* Human errors: Management error, internal fraud.
* Natural disasters: Fires, floods damaging premises or equipment.
* Supply chain issues: Shortage from a key supplier.
6. Reputation risk
* Bad publicity: A scandal, defective product recall, or dubious practices can severely damage the company’s image, scaring away customers and investors.
7. Regulatory and legal risk
* Legislative changes: New laws or regulations might impose additional costs on the company (stricter environmental standards, new taxes).
* Legal disputes: A lawsuit from a client, employee, or competitor can lead to significant costs and damage reputation.
Understanding these risks is the first step to managing them effectively. Whether you’re an individual or a business, sound financial planning and precautionary measures (like a rainy day fund or tailored insurance) are essential to minimize the negative impact of these risks.