The ongoing crisis in the Middle East, particularly the blockade of the Strait of Hormuz, has cast a shadow over the global economic outlook. On Tuesday, the International Monetary Fund (IMF) revised down its 2026 global growth forecast to 3.1%, from a prior bottom-up estimate of 3.4%.

On Monday, leaders of the IMF, International Energy Agency (IEA) and World Bank Group warned of the economic fallout from the conflict involving Iran, the US and Israel, as they met to coordinate their institutional response to the crisis.

"The impact of the war is substantial, global, and highly asymmetric, disproportionately affecting energy importers, particularly low-income countries. It has driven up oil, gas, and fertilizer prices, raising concerns over food security and job losses. Some Middle Eastern oil and gas producers have also suffered dramatic export revenue losses," the heads of the organizations said in a statement.

Following the meeting, Fatih Birol, head of the IEA, noted that no new energy shipments were loaded in April, warning that the month could prove tougher than March for energy markets and the global economy. "The longer the disruption lasts, the more severe the problem becomes," Birol said, adding that the IEA is ready to release additional reserves if needed.

Wang Ruibin, director of the Department of World Economics and Development at the China Institute of International Studies, told the China Media Group (CMG) that the ongoing Middle East conflicts are likely to create significant shocks in energy, finance and food markets. Combined with pre-existing trade tensions, this could undermine confidence in economic growth across sectors, causing substantial deviations from projected trajectories and placing considerable pressure on 2026 economic activity, Wang added.

Crisis in oil, food and finance

The warnings are supported by concerning facts. IMF Managing Director Kristalina Georgieva said the conflict has reduced global oil supply by 13%. Brent crude, which was around $70 per barrel at the end of February, has surged above $100 per barrel on Tuesday, with no immediate sign of a swift reopening of the Strait of Hormuz.

Sultan Al Jaber, CEO of Abu Dhabi National Oil Company, told Anadolu Agency that "the final cargoes that transited the strait before the conflict are now arriving at their destinations. The 40-day gap in global energy flows is now fully exposed."

Birol told Le Figaro that "If the strait remains closed throughout April, we will lose twice as much crude and refined products as in March. This war is paralyzing one of the lifelines of the global economy – not just oil and gas, but also fertilizers, petrochemicals, helium and more."

The crisis has also triggered fertilizer shortages, threatening crop yields and food security. According to the UN Food and Agriculture Organization (FAO), Gulf countries account for 30-35% of global urea exports and 20-30% of ammonia exports. Since the outbreak of the conflict, around 1.9 million tonnes of fertilizer have been stranded at sea, said market research firm Kpler.

In an interview with CGTN, FAO Chief Economist Maximo Torero said soaring natural gas and oil prices have driven fertilizer costs up by as much as 50%, and that the real impact will hit the next planting season. He says it could trigger dramatic inflation in food costs in the second half of this year and beyond.

The FAO's April report noted that the international food price index rose for the second consecutive month.

Meanwhile, global debt reached a record $348 trillion last year – more than three times global GDP, according to data from the International Finance Association. "Never has the world entered a crisis with such high deficits and debt levels. This limits governments' ability to cushion the impact of elevated energy prices," Ruchir Sharma, chair of Rockefeller International, wrote in the Financial Times.

Global economic resilience tested

Bloomberg reported that Asian nations heavily reliant on oil through the Strait of Hormuz are diversifying supplies. Japanese refiners are sourcing more crude from the US, while Indian refiners are increasing purchases from Venezuela.

A UN Development Program report warned that further escalation could cause $97-299 billion in economic losses across the Asia-Pacific and push 8.8 million people into poverty. Maybank Investment Bank has revised down its 2026 GDP forecast for six major ASEAN economies from 4.8% to 4.5%.

Wang said that if the Middle East crisis persists, it will further disrupt global energy, supply chains, trade and investment, drive inflation, heighten certain government debt risks and slow global growth. Energy-importing countries in Asia and Africa will face multiple pressures including debt, currency and food challenges – while policy space shrinks, he added.

Although not yet a full-scale crisis, Wang noted, the situation already poses a significant threat to the global economy and continues to test countries' economic resilience.

Wan Zhe, economics professor at Beijing Normal University, told CMG that this crisis – marked by energy shocks, inflation resurgence, capital flight and currency restructuring – is reshaping the global order.

Wan stressed that emerging economies face the most severe and uneven impacts. High-risk countries, typically with energy import dependence above 80% and short-term external debt covering less than three months of imports, are particularly vulnerable to a vicious cycle of trade deficits and currency depreciation, which may drive imported inflation higher, she said, adding that fiscal subsidies exacerbate budget pressures and raise the risk of sovereign credit downgrades.

This crisis is not merely a simple price fluctuation; it is a historic stress test that could reshape global trade flows, currency dynamics and the hierarchy of economies, Wan said.

(With input from agencies)