The Strait of Hormuz crisis, nearing four months, is a deadlock with Iran charging ships and the US enforcing an embargo. Negotiations are stalled, risking wider conflict. Iran faces severe economic damage, losing $435 million daily, while Gulf states urge diplomacy to protect their economic diversification plans.
The closure of the Strait of Hormuz until August could trigger a global recession comparable to the 2008 crisis, according to Bloomberg citing Rapidan Energy Group. Analysts predict significant oil price hikes and demand reduction, potentially exacerbating existing economic vulnerabilities.
The economic warnings are bleak, but full extent of shortages are still not felt for many European countriesThe biggest energy shock in modern history, jet fuel shortages “within weeks”, a global recession – since Iran throttled shipping flows through the strait of Hormuz at the end of February the economic warnings have become increasingly dire.Yet 10 weeks on from the first US-Israeli attacks, share indices, companies and governments have been surprisingly sanguine. Every day the divergence grows between the eerie quiet on markets and alarming warnings of an imminent supply chain crunch. Continue reading...
An exodus of workers will be damaging – and electoral change might help Britain escape instability and low growthWhile all eyes are on the Middle East and the risk of a global recession, a possible scenario with significant downside risk for the UK economy after the next general election is building: the impact of anti-immigration policies.We do not know enough about the actual policy changes a Reform UK-led government would impose, but if we get forced repatriation (including of some who were born in Britain) combined with a climate of fear, the economic disruption could be highly significant. Continue reading...
Oil prices surged to four-year highs on Thursday as fears of US-Iran war escalation rattled markets. Brent crude briefly hit $126.41/barrel before retreating to $115.80, while US gasoline prices rose to $4.30/gallon. The Strait of Hormuz, handling 20% of global oil flows, has seen tanker movements collapse to single digits. The International Energy Agency called it the 'largest supply disruption in history,' with analysts warning extended disruption could trigger global recession.
"The longer this vital artery is choked, the harder it will be to reverse the damage," Antonio Guterres noted
BP has reported nearly $3.2bn profit in Q1 2026, more than double the $1.38bn from the same period last year, driven by exceptional contributions from oil trading operations amid the Iran war that began at the end of February. The surge in oil and gas prices in March disrupted regional energy supplies, benefiting the oil major despite ongoing Middle East conflict. CEO Meg O'Neill acknowledged the "environment of conflict and complexity" while noting strong operational performance and increased production in the Gulf of America.
Over 3,300 Iranians, including 383 children, have been killed since the US and Israel launched military operations. The conflict's economic toll is escalating rapidly, with US military costs exceeding $11.3bn in just six days and total US costs potentially reaching $1tn when long-term factors are included. Global impacts are severe: US households face $410 in additional costs, UK households £480 annually, and Arab economies could contract by $120-194bn after one month. The IMF warns of potential global recession, while 45 million more people could face acute food insecurity, primarily in Asia and Africa.
