Iran war fuels energy shock

The Iran war has turned an oil-and-gas shock into the main threat to global growth, pushing energy costs ahead of tariffs in economic forecasts. (iif.com) At the International Monetary Fund and World Bank spring meetings in Washington last week, the International Monetary Fund cut its 2026 global growth forecast to 3.1% and said global inflation will tick up in 2026 under a “limited conflict” scenario. (imf.org) The Institute of International Finance said the new focus is no longer whether trade policy cools demand, but whether conflict in the Middle East keeps energy markets unstable for months. Its April 22 note said market prices had calmed more than the underlying risks. (iif.com) The choke point is the Strait of Hormuz, the narrow shipping lane between Iran and Oman that carries about a fifth of global oil and liquefied natural gas flows. Reuters reported the waterway has been effectively shut since Feb. 28. (straitstimes.com) The International Energy Agency said in its April oil market report that the war has erased expected oil-demand growth for 2026. CNBC reported the agency’s 32 member countries had already agreed earlier this month to release a record 400 million barrels from emergency stockpiles. (iea.org, cnbc.com) Australia is one example of how the shock spreads beyond the battlefield. InvestorDaily, citing the International Monetary Fund’s April 2026 World Economic Outlook, reported Australia’s growth at 2.0% in 2026 and inflation at 4.0%, up from 2.9% in 2025. (investordaily.com.au) China shows the trade side of the same problem. Customs data released in April showed exports rose 2.5% in March from a year earlier, missing expectations for 8.6%, while imports jumped 27.8% as higher energy and raw-material costs pushed up bills. (cnbc.com) At the Canton Fair in Guangzhou, Reuters reported one plastics factory had seen raw-material costs jump 20% since the war began and could not fully pass those increases on to overseas buyers. That leaves exporters absorbing higher fuel, power and shipping costs while foreign demand softens. (msn.com) The International Monetary Fund said the world economy would have looked slightly stronger in 2026 without the war, with pre-conflict assumptions pointing to 3.4% growth instead of 3.1%. Its current forecast assumes the disruption starts fading by mid-2026, not that the shock has already passed. (investordaily.com.au, imf.org) That leaves the global outlook tied to a single question: whether oil and gas can move normally through Hormuz again. Until that changes, central banks, exporters and importers are all pricing the same risk. (axios.com, imf.org)