IMF warns Middle East conflict could fuel global inflation as oil surges above $100
IMF Managing Director Kristalina Georgieva warned that escalating conflict in the Middle East could push global inflation higher, saying a 10% rise in oil prices sustained for most of the year would add about 40 basis points to global inflation, as Brent and WTI briefly neared $120 a barrel.
IMF Managing Director Kristalina Georgieva warned on Monday that conflict in the Middle East could pose fresh risks to global inflation, saying that if oil prices rise by 10% and remain at that level through most of the year, global inflation would increase by about 40 basis points.
“We are seeing resilience tested again by the new conflict in the Middle East,” Georgieva said at a symposium hosted by Japan’s finance ministry, adding: “My advice to policymakers in this new global environment is think of the unthinkable and prepare for it.”
Oil prices surged by around 25% on Monday to their highest levels since mid-2022, driven by fears that the expanding war could squeeze supplies and disrupt shipping through the Strait of Hormuz. Brent climbed to $119.50 a barrel, while US WTI reached $119.48.
Analysts at ING said “the situation appears to be deteriorating further,” adding that upstream oil production had begun to shut in as storage constraints bite, with Iraq, Kuwait and the UAE starting to reduce output.
