S&P Global Ratings has assessed the potential macroeconomic effects of the ongoing war in the Middle East, focusing on its implications for the US economy and related sectors, including metals and mining. The agency stated that its base-case scenario assumes the conflict remains contained and relatively short-lived, limiting its overall economic impact.
According to S&P, the US economy is expected to remain resilient under the base-case scenario, with no significant disruption to growth. However, the agency noted that the conflict could still influence economic conditions through specific transmission channels and US economic growth could slow down, particularly if tensions escalate or persist.
Energy prices and inflation remain key risks
S&P identified oil prices as the main channel through which the war could affect the US economy. A rise in oil prices could:
- increase inflationary pressures,
- affect consumer spending,
- and influence monetary policy expectations.
These developments could lead to tighter financial conditions.
S&P emphasized that a more severe or prolonged conflict could result in stronger increases in energy prices, broader inflationary effects and increased volatility in financial markets. Such a scenario could have more pronounced consequences for the US economy, with knock-on effects for industrial sectors, including steel-related value chains.
Indirect implications for metals and mining
Within this macroeconomic framework, S&P noted that metals and mining are among the sectors exposed to indirect risks. The potential impact includes higher energy and input costs, inflation-driven cost pressures and shifts in economic activity affecting demand.
