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The possible effects on developing country economies of a rise in oil prices in case of military action against Iran

Research report

Written by Dirk Willem te Velde

Research report

Recent discussions on nuclear facilities in Iran have set the regime in Iran on a possible collision course with the US, EU and the UN. While the latest US intelligence is more cautious, several commentators have speculated that there could be a military strike in the near future. This paper suggests that a military strike on Iran’s nuclear facilities could have major economic and social effects. Apart from the humanitarian and developmental effects in Iran itself, and in addition to the costs of a military strike itself, there are likely to be substantial effects on developing countries, particularly on poor, oil importing countries in Africa.

Dirk Willem te Velde