The International Energy Agency (IEA), International Monetary Fund (IMF), and World Bank Group have raised fresh concerns over the worsening economic consequences of the ongoing war in the Middle East, warning that the conflict is triggering a far-reaching shock to global energy markets and the broader world economy.
The three institutions issued the warning after a high-level meeting held on Monday under a coordination group they established earlier this month to jointly assess and respond to the fallout from the conflict.
According to the organisations, the war has already disrupted global supplies of oil, gas and fertiliser, driving up prices and increasing pressure on economies that rely heavily on imported energy. They said the impact has been particularly severe for low-income and energy-importing countries, which are now facing rising inflation, food insecurity and growing risks of job losses.
In a joint statement released after the meeting, the institutions said the effects of the crisis have been “substantial, global and highly asymmetric,” with poorer nations bearing the heaviest burden.
The rise in oil, gas and fertiliser prices is already spilling over into food markets, increasing concerns over the affordability and availability of basic goods. The institutions warned that higher energy costs, combined with supply disruptions, could further weaken fragile economies and deepen poverty in vulnerable countries.
They also noted that some oil and gas-producing countries in the Middle East have suffered significant losses in export revenue as a result of the war and the damage to key energy infrastructure.
The IEA, IMF and World Bank said uncertainty remains high, particularly because shipping through the Strait of Hormuz has not yet fully returned to normal.
The Strait of Hormuz, one of the world’s most important shipping routes for crude oil and natural gas, has been at the centre of the disruption. The institutions warned that even if shipping activity resumes fully in the coming weeks, it will take considerable time for global supplies of key commodities to recover to pre-war levels.
They added that fuel and fertiliser prices could remain elevated for an extended period because of the extensive damage to infrastructure across the region.
“Even after a resumption of regular shipping flows through the Strait, it will take time for global supplies of key commodities to move back towards their pre-conflict levels,” the institutions stated.
The disruption is also expected to affect a wide range of industries beyond the energy sector. Shortages of key inputs could impact agriculture, manufacturing and transportation, while the prolonged rise in fuel prices may increase production and logistics costs globally.
Beyond trade and energy, the institutions warned that the conflict has displaced large numbers of people, reduced employment opportunities and hurt travel and tourism across the region.
They said these wider economic effects could take much longer to reverse, even if hostilities ease.
The meeting came ahead of the release of the IEA’s monthly Oil Market Report and the IMF’s latest World Economic Outlook on Tuesday, both of which are expected to provide updated forecasts on global growth, inflation and energy demand.
The organisations said they reviewed the situations of the countries most affected by the crisis and discussed measures to cushion the impact.
According to the statement, their teams are already working together at country level to provide policy advice and technical support. The IMF and World Bank also indicated that financial assistance could be made available to countries facing the greatest strain.
