The Apocalypse Scenarios: will the global economy withstand the test of the war in the Middle East

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented to the business publication Profil on the current situation in the Middle East in the context of its impact on global energy markets.

If the strait is closed within three to four weeks, the price of oil above $ 100 will become the new normal for the next few months, or even until the end of 2026, Alexey Gromov said. Let the strait be unblocked later, but the oil market will recover from the shock for a very long time.

The second factor influencing the dynamics of global fuel prices, according to the expert, is the attacks by the United States and Israel on Iran's oil facilities and the latter's strikes on the oil infrastructure of the Persian Gulf countries. The price jump to almost $120 per barrel (Monday, March 9) occurred just after Washington and Tel Aviv had been hitting the Iranian oil industry with bombs and missiles with maximum intensity for two days in a row, and Iran retaliated by launching missiles and drones at the energy infrastructure of Iraq, Saudi Arabia, and the United Arab Emirates. Kuwait and Qatar.

"If it is possible to resume the movement of tankers through the Strait of Hormuz fairly quickly, then it takes time to repair the infrastructure that has received serious or critical damage, – Alexey Gromov explained. Of course, these delays will be converted into the cost of raw materials."

According to the analyst, sometime before mid-March, oil from tankers "can be sorted out by buyers without the risk of supply disruptions." Next, importing countries will have to unlock their strategic reserves. Japan has already started doing this, followed by South Korea, Taiwan, and so on. The use of reserves will help to avoid a deficit for another two to three months. Some experts call it a long time – three to four months. But then the problems will begin.

In addition, as already mentioned, the blocking of the Strait of Hormuz for three to four weeks is likely to raise the cost of a barrel to $100 and above. With the global economy slowing (according to the UN forecast, global GDP growth will be 2.7% in 2026 versus 2.8% in 2025), rising energy prices may trigger stagflation – high inflation combined with economic stagnation. And this is indeed a direct path to crisis.