War shocks PMIs, oil supply hit
The Middle East conflict is already rippling through global demand—PMIs across major economies are set to decline while Iraq has declared force majeure on oil exports after attacks on infrastructure, lifting energy-price and stagflation concerns ( ). Analysts warn the shock could persist for months and, combined with Iran’s continued role in the fighting, complicate recovery prospects and keep inflationary pressure elevated ( ).
Bloomberg’s median survey shows every PMI series it tracks is forecast to fall when initial March readings are published on Tuesday, March 24. (businesstimes.com.sg) Sovereign and industry sources reported Iraq declared force majeure on foreign‑operated oilfields after navigation through the Strait of Hormuz was disrupted, a move first reported by Reuters on March 20. (al-monitor.com) Baghdad ordered southern production cuts that reduced Basra crude output to about 900,000 barrels per day from roughly 3.3 million bpd, a drop of about 2.4 million bpd as exports from southern ports were halted. (boereport.com) Brent and WTI rallied on the news, with Brent trading above $110 and spiking toward $112 a barrel, while U.S. Treasury yields rose as investors priced a higher near‑term inflation risk. (cnbc.com) Macro strategists warn the combination of tanker backlogs, damaged Gulf energy infrastructure and continued Iranian involvement could keep the supply shock in place for months, reviving stagflation concerns on Wall Street. (politico.com) Global PMI releases next week will provide the first consolidated business‑activity read for March that markets and policymakers use to assess whether the demand shock is broadening, even as the Fed held the federal funds rate at 3.50%–3.75% on March 18 and kept only one cut penciled in for 2026. (pmi.spglobal.com)
