Strait of Hormuz blockade and Iran conflict drive global oil and debt crises

The ongoing conflict between the United States, Israel, and Iran has led to a de facto closure of the Strait of Hormuz, reducing the global oil supply by approximately 20%. Brent crude prices have risen to 105 USD per barrel, a 50% increase from late 2025. Additionally, oil freight rates have surged from 2.5 USD to 11 USD per barrel due to vessel shortages and increased diesel costs.

Economic consequences are widespread. The World Bank lowered its 2026 growth forecast for Gulf Cooperation Council states from 4.3% to 1.3%, with Qatar and Kuwait facing projected economic contractions of 5.7% and 6.4% respectively due to attacks on energy infrastructure.

Global debt levels have reached approximately 360 trillion USD, triple the global social product. The United States holds nearly 40% of all sovereign debt, with its debt-to-GDP ratio rising from 34% in 1980 to over 125% currently.