BCA Research’s chief geopolitical strategist, Matt Gertken, told The Business that when you look at the military profile of the conflict, “it’s enormously significant because it threatens the existence of the Iranian regime.” He says there’s no easy “off-ramp” for Donald Trump and the US from the war. And it’s unlikely to wrap up in days or weeks. Matt Gertken says a prolonged conflict could see oil prices spike by another 30 to 50 per cent. He says that would hurt global growth by raising prices, crimping spending, particularly for a tapped-out US consumer. He says it typically takes a doubling of oil prices to spark a recession, and that’s unlikely because the economy is less energy-dependent than it was in the 1970s. At the time of the interview, Brent Crude was trading at $US83 a barrel. As for the Canadian Prime Minister Mark Carney’s call for middle powers to band together, Matt Gertken says it’s likely those nations will still remain by the side of the US, “while the US is a contributor to global imbalances and it’s pursuing aggressive foreign policy. It’s also true that China’s a contributor to global imbalances and many US allies will still ultimately prefer to remain US allies.”
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