the conflict in the Middle East persists

Tensions between Israel and its neighbours have persisted since the state of Israel was established in 1948.

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WAR'S NOTHING NEW FOR THE REGION

Because of its strategic and geographic importance, the Middle East has also seen the involvement of major powers in regional conflicts - such as Russia's invasion of Afghanistan and the US invasion of Iraq.

But the war launched by the US and Israel against Iran has had major economic consequences, with Iran attacking gulf states friendly with the US and blocking the Strait of Hormuz to disrupt global oil supplies.

At time of writing, no permanent resolution had been found to the conflict. Whether it ends, escalates or - most likely - drags on in a nowhere space between peace and all-out conflict, the fallout for the rest of the world will be lasting.

THE IMF IS CONCERNED

In a report in April, the International Monetary Fund (IMF) warned a longer or broader conflict could significantly weaken global growth, cause inflation to surge and destabilise financial markets.

It outlined three scenarios depending on how long Middle East energy supplies are disrupted.

In the best case scenario, in which disruptions to world energy supplies are short-lived and prices rise to an average $US82 a barrel, it expects global GDP growth to fall from 3.4% to 3.1% this year and inflation to rise to 4.4%. Growth, it says, is likely to settle at 3.2% for the medium term, down from the average 3.7% from 2000 to 2019. Without the war, it would have revised its growth projections upward.

The fund warns that a longer shutdown of the Strait of Hormuz and further damage to drilling and refining facilities would disrupt the global economy "more deeply and for longer".