The International Monetary Fund published an analysis of the economic fallout from the war in the Middle East, warning that higher energy prices, disrupted supply chains and tighter financial conditions are the main transmission channels. It expects the shock to be global but highly uneven, with the likely common outcome being higher prices and slower growth, especially for energy importers and countries with limited fiscal and external buffers. Energy supply risks are central, with about 25 to 30 percent of global oil and 20 percent of liquefied natural gas transiting the Strait of Hormuz; the de facto closure of the strait and damage to regional infrastructure have produced what the International Energy Agency calls the largest disruption to the global oil market in its history. Large energy importers in Asia and Europe face higher fuel and input costs, including renewed exposure in parts of Europe reliant on gas-fired power such as Italy and the United Kingdom, while France and Spain are described as relatively more protected due to higher nuclear and renewables capacity. Supply-chain disruption is also raising freight and insurance costs, affecting air traffic and tourism, and constraining fertilizer shipments, of which around one-third passes through the Strait of Hormuz, adding to risks of higher food prices and food insecurity in low-income countries where food accounts for about 36 percent of consumption on average. The IMF also highlights increased market volatility, falling global stock prices, higher bond yields and wider credit spreads, which together tighten financial conditions and complicate refinancing for governments and firms, particularly in emerging and low-income economies with meager reserves. The IMF will provide a fuller assessment in its World Economic Outlook and Global Financial Stability Report to be published on April 14, followed by its Fiscal Monitor on April 15, and it notes it is supporting member countries with policy advice, capacity development and, where needed and in coordination with the international community, financial assistance.
International Monetary Fund 2026-03-30
International Monetary Fund outlines how the Middle East war is transmitting shocks through energy, trade and financial markets
The International Monetary Fund warns that the war in the Middle East is raising energy prices, disrupting supply chains and tightening financial conditions, pushing up inflation and slowing growth, especially for energy importers and countries with weak fiscal and external buffers. It flags severe energy supply risks from potential disruptions in the Strait of Hormuz, higher freight and insurance costs, and greater food insecurity in low‑income countries, alongside increased market volatility and tougher refinancing conditions for governments and firms in emerging and low‑income economies.