WORLD'S ECONOMIC WOUNDS : SUPREME ESSAY

ALL AND EVERY ECONOMY see risks multiplying worldwide with no end in sight. The price spikes which were mitigated early in war, but as conflict continues, options simply evaporate.

For a while now, somehow, the global economy has been beating the odds. The energy shock prompted by the American and Israeli attacks on Iran in February set off the largest disruption of worldwide energy flows in history.

Yet despite jumps in oil prices, widening conflict in the Middle East, fuel shortages and inflation pressures, the feared crash never came and most economies managed to huddle through.

But wiggle room is narrowing at the same time the outlook is darkening. Look at what has just happened recently.

Attacks forced Saudi Arabia to shut a vital pipeline. Houthi militia seized a strategic Red Sea island and a port city, which could further restrict shipping in the region. And proposed negotiations among Gulf nations fell apart. Oil prices shot toward $110 a barrel.

The price spike has caused rolling blackouts, rationing and angry protests from Asia to Latin America. 

In the Philippines, fishermen docked their boats because they can't afford fuel. In Bangladesh power outages caused long work stoppages at factories. In Guatemala, protesters burned tires and cars.

Until now, some key moves to ease demand and bolster oil supplies helped blunt extreme price increases and acute shortages.

'' The No. 1 reason why crude oil prices and product prices have not been higher than they are is that  China has cut its crude oil imports,'' said David L. Goldwyn, a former U.S. diplomat and Energy Department official.

The world's largest importer of oil, China stopped stockpiling oil and relied on its own inventories, easing pressure on the global oil market at a critical moment. It also reduced or withheld exports of products made from oil, like jet fuel, meaning it needed less crude oil.

At the same time, the United States, Japan and countries across Europe dipped into their own reserves to keep prices from rising further.

!WOW! thanks Patricia Cohen.