As Israel's war on Gaza drags on, the human cost of the conflict is immense and rising. But along with the violence and death, there is an economic backdrop that could prove volatile and difficult to reverse.
On the macroeconomic landscape, the global economy is teetering towards recession, as low growth and persistent inflationary pressure, especially on food and fuel, combine with high borrowing costs, lack of fiscal space for many indebted economies, competitive industrial policy in renewables that may detract from decarbonisation incentives in the developing world.
In oil markets, prices are rising due to the conflict and concern over insurance costs if the conflict spreads in the region.
There is also an open threat from Iran and its request for other OPEC members to embargo oil exports to Israel. Israel, of course, does not purchase oil from Iran, but it is an oil importer.
The threat is more of a reminder of the politics of the 1973 embargo and a fear of the weaponisation of oil in global markets. More broadly, price differentials in oil sales from Iran and Russia due to sanctions and price cap mechanisms continue to be a burden for other OPEC members to balance, with producer Saudi Arabia continuing its own cuts to try and balance prices. Oil futures rose 3% on the news of Israel's strike on Gaza's Al-Ahli Baptist Hospital to $93 per barrel on Tuesday.
While energy markets are the first point of economic reaction to a volatile and incendiary regional conflict, there are longer-term risks to consider.
Shrinking access to capital
Access to capital is shrinking for many lower-income economies as borrowing costs surge, and investors turn away from emerging markets in fear of an already weak global outlook and a regional downturn.