Trending Now - Escalating Conflict Threatens Global Energy Stability and Growth
WHO:
Josh Lipsky, chair of international economics at the Atlantic Council
Joe Brusuelas, chief US economist at RSM
Holger Schmieding, chief economist at Berenberg bank
Gillian Boccara, senior director of gas and power at commodities intelligence provider Kpler
World Trade Organization (WTO)
Robert Staiger, WTO’s chief economist
Donald Trump, President of the United States
WHAT:
Consumer price inflation in the European Union, which stood at 2% in January 2026, could rise by more than a percentage point if the conflict continues for several months.
Up to half a percentage point could be shaved off economic growth in the European Union if the conflict persists.
Gas prices in the United States have increased more than 30% in the past month, rising from $2.92 to $3.88 on average.
At least 11 tankers carrying gas bound for Europe have been rerouted to Asia since the war began, as buyers there have outbid European rivals.
The WTO expects the growth rate of global goods trade to slow to 1.9% in 2026, a decrease from previous predictions made six months ago.
A year-long period of high energy prices could knock an additional 0.5% off goods trade growth.
Consumer price inflation in the European Union could rise by more than a percentage point if the conflict in the Middle East continues for several months.
Gas prices in the United States have jumped more than 30% in the past month, increasing from $2.92 to $3.88 on average.
The WTO warned that prolonged high oil prices could “crimp” the AI boom.
The WTO identified the war in the Middle East and its impact on energy and fertilizer costs as the main risk to the global economy.
In 2025, AI investment helped offset the impact of Trump’s tariffs on global trade.
The WTO calculated that in the first three quarters of 2025, about 70% of all investment growth in North America was accounted for by AI-related goods.
World trade in goods expanded by 4.6% in 2025 despite Trump’s protectionist policies.
The WTO expects the growth rate of global goods trade to slow to 1.9% in 2026.
A year-long period of high energy prices could knock an additional 0.5% off goods trade growth.
WHERE:
Pakistan has shut schools for two weeks due to spiking gas prices.
In Pune, India, gas-powered crematoriums have suspended operations due to gas rationing.
Geneva, Switzerland (location of the WTO)
Gulf region (major exporter of energy and fertilizers)
WHEN:
The WTO’s latest Global Trade Outlook was released in March 2026.
The catastrophic US housing crash occurred in 2008.
The first three quarters of 2025 were referenced for investment growth statistics.
WHY:
The energy shock intensified after Iran struck Qatari hubs for liquefied natural gas in retaliation for Israel’s attack on Iran’s South Pars facility, part of the world’s largest natural gas field.
The energy shock intensified after Iran struck Qatari hubs for liquefied natural gas in retaliation for Israel’s attack on Iran’s South Pars facility.
High energy prices are linked to the conflict in the Middle East, which could impact output and trade.
A prolonged interruption in supply from the Gulf region could exacerbate food security issues.
HOW:
South Korea imposed its first wholesale fuel price cap in 30 years in response to rising energy prices.
Pakistan cut some government salaries to balance its budget amid rising energy costs.
Thailand ordered some officials to work from home due to the energy crisis.
At least 11 tankers carrying gas bound for Europe have been rerouted to Asia since the war began, as buyers there have outbid European rivals.
The WTO suggested that risks to the forecast are mostly linked to higher energy prices due to the Middle East conflict.
(UPDATED March 20, 2026 17:15 UTC)
Today, experts are warning that consumer price inflation in the European Union, which was at 2% in January, could rise significantly if the ongoing conflict continues, potentially shaving off half a percentage point from economic growth. In the U.S., gas prices have surged over 30% in just a month, climbing from $2.92 to $3.88 on average, while at least 11 tankers carrying gas to Europe have been rerouted to Asia as buyers there outbid their European counterparts. Meanwhile, countries like Pakistan have closed schools for two weeks and cut government salaries, while South Korea has implemented its first wholesale fuel price cap in three decades in response to this escalating energy crisis.
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(UPDATED March 20, 2026 13:21 UTC)
The World Trade Organization has revised its forecast, now expecting the growth rate of global goods trade to slow to 1.9% in 2026, down from earlier predictions made just six months ago. This slowdown is partly due to a year-long period of high energy prices, which could further reduce goods trade growth by an additional 0.5%, while gas prices in the United States have surged more than 30% in the past month, rising from $2.92 to $3.88 on average. The energy shock intensified after Iran targeted Qatari liquefied natural gas hubs in response to Israel's actions, leading to at least 11 tankers being rerouted from Europe to Asia, where buyers are willing to pay more.
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(UPDATED March 20, 2026 11:10 UTC)
In a recent report from the World Trade Organization, chief economist Robert Staiger warned that prolonged high oil prices could hinder the ongoing AI boom, with the conflict in the Middle East identified as a major risk to the global economy. The WTO noted that despite President Trump's protectionist policies, world trade in goods expanded by 4.6% in 2025, largely driven by AI investments, which accounted for about 70% of investment growth in North America during the first three quarters of that year. However, the organization expects the growth rate of global goods trade to slow to 1.9% in 2026, with a potential additional 0.5% reduction if high energy prices persist.