Here we look at 4 potential outcomes of the Middle East War through the lense of energy prices and demand destruction that matches the outcome. Demand destruction is measured in terms of:
- the required reduction in global energy consumption to do without Gulf energy output.
- how much global macroeconomic demand would have to adjust to achieve a new equilibrium.
- How much of this adjustment is achieved by an inflation tax and how much by a supply side rationing of scarce inputs from the Gulf.
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