Geopolitical risk: After Ukraine, it's Gaza

As a familiar script plays out, the threat to the world economy is limited

“Geopolitical risk” has been a huge buzzword since the eruption of the Ukraine conflict in February 2022. It connotes the potential for disruption to the world economy arising from armed conflict. Geopolitical risk sounds more technical and impressive than “war”.  People use it for the same reason they prefer “mindset” to “attitude”.

In 2022, the significant geopolitical risk was an escalation in the Ukraine conflict that would derail the world economy by causing crude oil prices to spiral well above $100 per barrel. That did not happen. Will it happen now with the conflict in Gaza?

Let us first examine