War in the Middle East : the global economy under intense strain
Since the outbreak of the conflict in the Middle East and the disruption of the Strait of Hormuz, global markets have experienced unprecedented shocks affecting energy prices, inflation, logistics chains and economic growth. In an already fragile environment, this crisis is reshaping risks and opportunities for the global economy, with effects now beginning to be felt as far as Africa.
The crisis surrounding Iran has directly affected one of the most sensitive levers of the global economy: energy. The Strait of Hormuz, through which around 20% of the world’s oil and liquefied natural gas flows, has seen traffic drop by nearly 90% due to tensions, disrupting hydrocarbon flows that are essential to billions of economic activities.
The immediate consequence has been a surge in oil prices, which have exceeded $110 per barrel, a level not seen since the COVID-19 pandemic, triggering pressure on production, transportation and fuel costs in many countries.
If the war continues, other Gulf energy producers could be forced to suspend their exports and declare force majeure… this will collapse the economies of the world
“If the war continues, other Gulf energy producers could be forced to suspend their exports and declare force majeure… this will collapse the economies of the world.”
On this point, Saad al-Kaabi, Qatar’s Minister of Energy, warned: “If the war continues, other Gulf energy producers could be forced to suspend their exports and declare force majeure… this will collapse the economies of the world.”
The impact is not limited to crude oil. Natural gas prices have also risen sharply, reaching unprecedented levels in Europe in early March, with fluctuations weighing heavily on industry and electricity markets.
Inflation returns to financial markets
The surge in energy prices is directly feeding through to financial markets and global inflation. In early March, major stock markets recorded noticeable declines. In Europe, for example, indices lost several percentage points, while in the United States the Dow Jones retreated, illustrating investors’ anxiety over renewed inflationary pressures.
Kevin Thozet, member of the investment committee at Carmignac, summed up the situation: “Investors fear an inflation shock due to the surge in hydrocarbon prices triggered by the conflict in the Middle East.”
This inflationary pressure has also been highlighted by Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), who explained that a sustained 10% increase in oil prices could add about 0.40 percentage points to global inflation and reduce growth by 0.1 to 0.2 percentage points if it persists.
Global growth in the balance: difficult trade-offs
While some economies are showing relative resilience, global growth remains under pressure. Disruptions to supply chains, rising energy costs and growing uncertainty are weighing on forecasts. According to compiled analyses, prolonged disruptions around key maritime routes could slow global growth and revive the risk of recession, particularly if price increases persist.
Central banks now face a delicate balancing act: curbing imported inflation without suffocating economic growth. Several international financial institutions are warning of a possible slowdown if these tensions continue.
Global food supplies could be severely affected if the war in Iran continues
Beyond energy, the war is also affecting agricultural markets. The cost of inputs such as fertilizers and fuel is rising, creating new pressure on food prices. According to an analysis by S&P Global Energy, disruptions in fertilizer exports, maritime transport and fuel supply threaten to increase global food inflation.
Svein Tore Holsether, CEO of Yara International, one of the world’s leading fertilizer producers, warned: “Global food supplies could be severely affected if the war in Iran continues.”
The combined effect of rising prices and a potential slowdown in global growth could weigh on demand for African exports
For African economies, far from being isolated, these external shocks are transmitted through several channels. Many African countries import a significant share of their fuel and agricultural inputs; therefore, rising oil and fertilizer prices directly affect production costs, food prices and household budgets.
Global inflationary pressures are reflected in the price of goods and services, placing additional strain on African central banks already facing macroeconomic challenges. Uncertainty surrounding energy prices can also slow foreign investment in key sectors such as infrastructure, industry and agritech.
From a trade perspective, maritime and logistical disruptions increase export and import costs, reducing the margins of African companies operating in global markets. Finally, the combined effect of rising prices and a potential slowdown in global growth could weigh on demand for African exports, particularly mining and agricultural products.
The need to strengthen energy and food resilience
The economic shock triggered by the conflict in the Middle East highlights the fragility of global supply chains still marked by the pandemic and other geopolitical tensions. Energy remains at the heart of these dynamics, and strengthening energy and food resilience has become a priority for many governments.
For Africa, this underscores the urgency of accelerating energy transitions, strengthening local production of agricultural inputs and expanding access to regional markets in order to reduce dependence on volatile imports. In an unstable global context, these strategies can also support more inclusive and sustainable growth.
