April 16: Impact of US-Iran War on International Economy, Financial Markets, and Livelihoods

The US has warned two Chinese banks that they will face secondary sanctions if they conduct business with Iran. Federal Reserve data indicates that US companies and households are still adapting to the impacts of Trump's tariff policies and energy disruptions, with many businesses adopting a wait-and-see approach. Oil prices have surged, with US analysts noting increased searches for electric vehicles, though sales are pending observation. According to the American Automobile Association (AAA), the national average price for gasoline on the 15th was $4.108 per gallon (approximately 3.785 liters), with California exceeding the national average at $5.878, nearing $6. Data shows that in March, searches for new electric and fuel-efficient vehicles increased by about 16% compared to the end of Q1 last year. Regarding the impact of rising oil prices on the US electric vehicle market, Stephanie Valdez Streaty, Industry Insights Director at Cox Automotive, stated, 'I think the public is considering (electric vehicles), but we won't see behavioral changes immediately. Oil prices may need to remain high for a long time before consumer purchasing behavior begins to shift.' Norway's crude oil export value hit a new high in March as the Middle East conflict drove up international oil prices and the Strait of Hormuz was blockaded. Statistics Norway announced today that Norway's crude oil export value in March reached a record high of 57.4 billion Norwegian kroner (approximately NT$192.2 billion). The average crude oil price in March was 1,014 kroner per barrel, marking a monthly high since September 2023. The International Monetary Fund (IMF) in its latest 'World Economic Outlook' report noted that ongoing Middle East conflicts are pushing up energy prices, leading to a downward revision of global economic growth forecasts. However, Brazil's forecast was revised upwards. The IMF believes Brazil, as an energy and commodity exporter, is expected to benefit from higher oil prices in the short term. The IMF raised Brazil's 2026 GDP growth forecast to 1.9%, an increase of 0.3 percentage points from the previous forecast. The report explains that Brazil exports more oil and petroleum derivatives than it imports, so increased export revenue from rising international energy prices helps improve 'terms of trade,' thereby boosting the economy. In its latest 'Beige Book' report, the US Federal Reserve (Fed) stated that 'the Middle East conflict is viewed as a significant source of uncertainty, making business decisions more complex regarding hiring, pricing, and capital investment. Many companies are adopting a wait-and-see attitude. Amid future uncertainty, business outlooks vary.' Although contacts in the Boston and St. Louis Federal Reserve Bank districts expressed some optimism regarding the war, more pessimistic sentiments prevailed in other regions. A contact from the Kansas City Federal Reserve Bank noted that low- and middle-income families 'cannot offset the pressure from low wages, tariffs, and inflation by simply being thrifty.' The report also indicated that overall price increases 'remained largely moderate.' (Editor: Hong Chi-yuan) 1150416