Middle East war fuels global energy crisis and dents growth outlook

The ongoing war in the Middle East has closed the Strait of Hormuz, creating a bottleneck for global oil supplies. In response, the World Bank cut its 2026 global growth forecast to 2.5%, the weakest expansion outside a recession in almost two decades, while the IMF notes a temporary dip in energy prices after a cease‑fire but warns that supply chains and freight rates will take time to normalise.

The crisis weighs hardest on developing economies. UNCTAD lists 61 vulnerable nations – including 35 least‑developed countries – that depend on oil and grain imports. Higher fuel and freight costs could add up to $20 billion annually to their import bills and push food prices up, raising the risk of acute malnutrition among poor children by 15 %. Sub‑Saharan Africa, a net energy importer, faces sharper inflation and food‑security challenges as transport and fertilizer costs rise.