YEREVAN, July 16. /ARKA/. The world economy's ability to mitigate the effects of potential disruptions in energy supplies through the Strait of Hormuz is becoming increasingly limited amid renewed hostilities between the U.S. and Iran. This is stated in a statement by the International Monetary Fund (IMF), as reported by Finmarket.
The IMF noted that the impact of the conflict on the global economy has been less significant than expected at the end of February, mainly because energy prices have not risen as sharply. This was facilitated by increased oil supplies from other producers, the use of strategic reserves, and the ability of companies and households to switch to alternative energy sources.
At the same time, the fund warns that the potential of these compensating factors is limited and may be exhausted in the event of a prolonged closure of the Strait of Hormuz.
“This time the initial blow was softened by the fact that energy markets had room to maneuver. As tensions in the Strait of Hormuz escalate again, this space is becoming smaller and continues to shrink as reserve capacities have already been utilized and stocks have decreased,” the IMF statement said.
Last week, the fund downgraded its global economic growth forecast for 2026 to 3% from the previously expected 3.1% in April, warning that growth rates could be even lower in the event of further escalation of the conflict in the Middle East.
According to the IMF, from early March to the end of May, disruptions in supplies through the Strait of Hormuz led to a reduction in oil supply of more than 1.1 billion barrels, equivalent to about 10 days of global consumption.
IMF Strategy Director Christian Mumssen stated that the factors that mitigated the negative impact of the conflict on economic growth are still in place, but prolonged disruptions in energy supplies could significantly worsen the prospects for the global economy. However, he added that it is still premature to assess what the updated IMF forecast for global GDP growth will be, which the fund will present in October.
