IEA, IMF, World Bank signal lasting impact of Middle East conflict on prices

The International Energy Agency, International Monetary Fund, and World Bank Group warned that fuel and fertilizer prices may remain elevated for an extended period, even if shipping through the Strait of Hormuz returns to normal.

In a joint statement, the three institutions noted that the ongoing conflict in the Middle East has had a "substantial, global, and highly asymmetric" impact. According to them, the consequences are being felt most acutely by energy-importing nations, particularly low-income countries that are more vulnerable to supply shocks.

The organizations believed that the disruption has already driven up prices for oil, gas, and fertilizers, raising serious concerns about global food security and potential job losses. At the same time, some producers in the region are experiencing significant declines in export revenues due to interruptions in trade flows.

They also stressed that shipping activity through the Strait of Hormuz has not yet fully normalized. Even once maritime traffic resumes, restoring global supply chains and commodity flows to pre-conflict levels is expected to take considerable time.

According to the assessment of these international institutions, the situation is likely to have a negative impact on both energy and food markets worldwide.