Supply chain and commodity price impacts

• Oil prices surged faster than during any recent conflict. Brent crude surpassed $100/barrel on March 8, 2026, peaked at $126/barrel, and has remained highly elevated . The World Bank called it the largest oil supply disruption in history .
• Gas prices rose roughly 55% since late February 2026, and fertilizer prices surged 35%, per UN estimates . Urea (a key nitrogen fertilizer) spiked 46% month-on-month in March .
• Global food prices hit their highest level since January 2024 in April 2026 . The World Bank projects fertilizer prices will rise 31% in 2026 .
• Supply chains are strained across Asia (shortages emerging from Thailand to Pakistan) with Europe at risk of diesel shortages if the strait stays closed . Thousands of maritime workers remain stranded as insurers pull coverage .

Food security

The FAO, World Bank, and Chatham House have all warned that the disruption is setting up a "systemic agrifood shock" . Key risks:

• Fertilizer shortages are hitting the next planting season in much of the developing world. Farmers face urea price increases of 20%–60%, plus higher fuel, transport, and irrigation costs .
• The World Economic Forum's Chief Economists' Outlook cites "grave concerns" about disrupted food production .
• The Kiel Institute projects the steepest food price increases in South Asia, sub-Saharan Africa, and the Middle East — regions already most vulnerable to hunger .
• Chatham House warns blockages of fuel and fertilizer through Hormuz are "set to push tens of millions more into acute hunger" .

Macroeconomic projections through 2027

IMF July 2026 World Economic Outlook Update :

• Global growth: 3.0% in 2026, rebounding to 3.4% in 2027 — a V-shaped recovery but still below the pre-war trend of ~3.5%.
• Global headline inflation: Rising from 4.1% in 2025 to 4.7% in 2026, then easing to 4.0% in 2027.
• The IMF has cut its 2026 growth forecast twice this year, citing "lingering effects of the energy shock" .

World Bank Global Economic Prospects (June 2026) :

• Global growth slowing to its lowest rate since the COVID-19 pandemic, driven by higher energy prices, steeper inflation, and higher borrowing costs.

Wood Mackenzie scenario analysis :

• Worst-case: Oil prices could reach $200/barrel if more than 11 million barrels/day of Gulf supply remains curtailed.
• Resolution scenario: Dated Brent eases to ~$80/barrel by end-2026, falling to $65/barrel in 2027.
• Even in the resolution case, the inflationary damage is largely "baked in" — Capital Economics warns it takes many months for higher energy and fertilizer costs to pass through food supply chains .

Regional inflation estimate (UN ESCAP) :

• Asia-Pacific regional inflation projected at 4.6% in 2026, up from 3.5% in 2025.

Key uncertainties

• Duration of the closure: If shipping through the strait resumes soon, some price pressure may ease, but the IMF and World Bank both caution that higher inflation is already embedded in supply chains through mid-2027 .
• Diplomatic resolution: A ceasefire or deal could trigger a sharp oil-price drop (WoodMac baseline), but repeated breakdowns in fighting (as seen in July 2026) keep risk premiums high.
• Food crisis timing: The FAO warned the worst food-price impacts could materialize 6–12 months after the disruption began — putting peak food inflation risk in late 2026 into early 2027 .

Supply chain and commodity price impacts

• Oil prices surged faster than during any recent conflict. Brent crude surpassed $100/barrel on March 8, 2026, peaked at $126/barrel, and has remained highly elevated . The World Bank called it the largest oil supply disruption in history .
• Gas prices rose roughly 55% since late February 2026, and fertilizer prices surged 35%, per UN estimates . Urea (a key nitrogen fertilizer) spiked 46% month-on-month in March .
• Global food prices hit their highest level since January 2024 in April 2026 . The World Bank projects fertilizer prices will rise 31% in 2026 .
• Supply chains are strained across Asia (shortages emerging from Thailand to Pakistan) with Europe at risk of diesel shortages if the strait stays closed . Thousands of maritime workers remain stranded as insurers pull coverage .

Food security

The FAO, World Bank, and Chatham House have all warned that the disruption is setting up a "systemic agrifood shock" . Key risks:

• Fertilizer shortages are hitting the next planting season in much of the developing world. Farmers face urea price increases of 20%–60%, plus higher fuel, transport, and irrigation costs .
• The World Economic Forum's Chief Economists' Outlook cites "grave concerns" about disrupted food production .
• The Kiel Institute projects the steepest food price increases in South Asia, sub-Saharan Africa, and the Middle East — regions already most vulnerable to hunger .
• Chatham House warns blockages of fuel and fertilizer through Hormuz are "set to push tens of millions more into acute hunger" .

Macroeconomic projections through 2027

IMF July 2026 World Economic Outlook Update :

• Global growth: 3.0% in 2026, rebounding to 3.4% in 2027 — a V-shaped recovery but still below the pre-war trend of ~3.5%.
• Global headline inflation: Rising from 4.1% in 2025 to 4.7% in 2026, then easing to 4.0% in 2027.
• The IMF has cut its 2026 growth forecast twice this year, citing "lingering effects of the energy shock" .

World Bank Global Economic Prospects (June 2026) :

• Global growth slowing to its lowest rate since the COVID-19 pandemic, driven by higher energy prices, steeper inflation, and higher borrowing costs.

Wood Mackenzie scenario analysis :

• Worst-case: Oil prices could reach $200/barrel if more than 11 million barrels/day of Gulf supply remains curtailed.
• Resolution scenario: Dated Brent eases to ~$80/barrel by end-2026, falling to $65/barrel in 2027.
• Even in the resolution case, the inflationary damage is largely "baked in" — Capital Economics warns it takes many months for higher energy and fertilizer costs to pass through food supply chains .

Regional inflation estimate (UN ESCAP) :

• Asia-Pacific regional inflation projected at 4.6% in 2026, up from 3.5% in 2025.

Key uncertainties

• Duration of the closure: If shipping through the strait resumes soon, some price pressure may ease, but the IMF and World Bank both caution that higher inflation is already embedded in supply chains through mid-2027 .
• Diplomatic resolution: A ceasefire or deal could trigger a sharp oil-price drop (WoodMac baseline), but repeated breakdowns in fighting (as seen in July 2026) keep risk premiums high.
• Food crisis timing: The FAO warned the worst food-price impacts could materialize 6–12 months after the disruption began — putting peak food inflation risk in late 2026 into early 2027 .