Rising global energy prices triggered by escalating tensions in the Middle East could fuel inflationary pressures and dampen economic growth worldwide, the International Monetary Fund has cautioned.
Crude oil markets have reacted sharply to the disruption of tanker traffic through the Strait of Hormuz, a critical artery for global energy supply. Benchmark Brent Crude and West Texas Intermediate have surged above $105 per barrel, with Brent briefly crossing $109. Meanwhile, Murban crude has climbed past $123, reflecting the severity of supply constraints as most tanker movements in the region remain stalled.
Speaking on the development, IMF spokesperson Julie Kozack said the conflict had already caused significant disruptions to seaborne oil and natural gas shipments, heightening risks to the global economy.
Although no country has formally requested emergency financial assistance, she noted that the Fund stands ready to support member nations if needed. IMF officials, she added, are actively engaging finance ministers, central bank governors, and regional institutions to monitor the situation and coordinate responses.
Kozack explained that the economic fallout would largely depend on how long and how intensely the conflict persists. She cited the IMF’s rule of thumb, which estimates that a sustained 10 per cent increase in energy prices over a year could raise global inflation by about 0.4 percentage points while reducing economic output by between 0.1 and 0.2 per cent.
She warned that if oil prices remain above $100 per barrel for an extended period, the consequences for inflation and global growth could be substantial.
Central banks, according to Kozack, must remain vigilant, particularly in assessing whether price pressures are spreading beyond energy and whether inflation expectations remain stable.
The IMF also indicated that growth prospects in the Gulf Cooperation Council region could weaken, depending largely on how quickly oil and gas exports can resume normal levels.
Earlier in March, the Fund had already flagged concerns about rising energy prices and trade disruptions linked to the Middle East crisis, noting that the evolving situation adds to an already fragile global economic outlook.
The latest escalation began on February 28, 2026, when the United States and Israel launched strikes on targets in Iran, triggering widespread explosions in Tehran and other areas. Since then, disruptions to crude supply have intensified, sending shockwaves through global petroleum markets.
The IMF said it is closely tracking developments and will incorporate the impact of the crisis into its upcoming global economic outlook, scheduled for release during the Spring Meetings in April.