Kurdistan Center
for Democracy in the Middle East
Khoyboun Flag
About us
www.kcdme.com
Global economy at risk as war on Iran escalates: FT
21.03.2026
By Al Mayadeen English
Source: Financial Times
Source:https://english.almayadeen.net/news/Economy/global-economy-at-risk-as-war-on-iran-escalates--ft
The Financial Times warns that the prolonged war on Iran is triggering a widening global economic shock driven by energy disruptions, rising prices, and mounting pressure on supply chains and financial systems.
The Financial Times on Saturday warned that the ongoing war on Iran is rapidly evolving into a global economic crisis, as initial assumptions of a short-lived escalation give way to mounting fears of prolonged disruption across energy markets and supply chains.
According to the report, financial markets had been “lulled by the belief that the conflict would not last long,” leading investors to underestimate the risks tied to instability in the Strait of Hormuz, a critical artery through which roughly one-fifth of global oil and liquefied natural gas flows.
However, with hostilities entering a fourth week and de-escalation prospects fluctuating daily, analysts now see worst-case economic scenarios beginning to materialize. The newspaper noted that sustained disruption to the waterway could trigger an oil shock exceeding those seen during the October 1973 war and the Iranian Revolution, underscoring the scale of potential fallout.
Cascading energy shock
Oil prices have already surged by around 50 percent since the outbreak of war, crossing the $100 per barrel threshold. Analysts cited in the report warned that prices could climb beyond $150 if supply constraints persist, a level that would significantly increase the likelihood of a global recession.
The crisis is not limited to oil. The Financial Times pointed to growing threats to natural gas supplies following reported damage to Qatar’s Ras Laffan facility, the world’s largest liquefied natural gas plant. The outlet noted that the escalation has driven gas prices higher across Europe and Asia, intensifying pressure on already strained economies.
Spreading economic strain
Beyond energy, disruptions in the Strait of Hormuz are also affecting key industrial inputs. The blockage of commodities such as fertilizer, sulphur, and helium is raising alarm across sectors ranging from agriculture to semiconductor manufacturing, indicating that the conflict’s economic impact is spreading through multiple layers of global production.
Central banks, meanwhile, are facing increasingly difficult choices. The Federal Reserve, European Central Bank, and Bank of England have opted to hold interest rates steady as they assess the situation. Yet the report cautioned that prolonged energy price increases could entrench inflation, while tighter monetary policy risks compounding economic slowdown and market instability.
Uneven impact
The burden of the crisis is expected to fall unevenly. European economies, already grappling with energy dependency shifts, face limited fiscal space to shield households and businesses. Asian importers such as South Korea and Taiwan remain heavily reliant on Middle Eastern energy flows, while developing countries confront rising food insecurity and declining remittances.
Although the United States is a net energy exporter, it is not immune. The report noted that higher global prices and increased domestic demand, particularly from energy-intensive sectors such as data centers, will continue to exert upward pressure on costs.
Enduring global disruption
The Financial Times concluded that even if the conflict were to end in the near term, the long-term implications for global trade and energy security would remain profound. “Markets and governments cannot quickly adapt to the blockage of the Strait of Hormuz,” the report stated, adding that the waterway’s vulnerability has now been firmly established as a strategic lever in future confrontations.
As the war persists, the report suggests, the global economy is entering a period of sustained uncertainty marked by volatile energy markets, fragile supply chains, and heightened geopolitical risk.
21.03.2026
By Al Mayadeen English
Source: Financial Times
Source:https://english.almayadeen.net/news/Economy/global-
The Financial Times warns that the prolonged war on Iran is triggering a widening global economic shock driven by energy disruptions, rising prices, and mounting pressure on supply chains and financial systems.
The Financial Times on Saturday warned that the ongoing war on Iran is rapidly evolving into a global economic crisis, as initial assumptions of a short-
According to the report, financial markets had been “lulled by the belief that the conflict would not last long,” leading investors to underestimate the risks tied to instability in the Strait of Hormuz, a critical artery through which roughly one-
However, with hostilities entering a fourth week and de-
Cascading energy shock
Oil prices have already surged by around 50 percent since the outbreak of war, crossing the $100 per barrel threshold. Analysts cited in the report warned that prices could climb beyond $150 if supply constraints persist, a level that would significantly increase the likelihood of a global recession.
The crisis is not limited to oil. The Financial Times pointed to growing threats to natural gas supplies following reported damage to Qatar’s Ras Laffan facility, the world’s largest liquefied natural gas plant. The outlet noted that the escalation has driven gas prices higher across Europe and Asia, intensifying pressure on already strained economies.
Spreading economic strain
Beyond energy, disruptions in the Strait of Hormuz are also affecting key industrial inputs. The blockage of commodities such as fertilizer, sulphur, and helium is raising alarm across sectors ranging from agriculture to semiconductor manufacturing, indicating that the conflict’s economic impact is spreading through multiple layers of global production.
Central banks, meanwhile, are facing increasingly difficult choices. The Federal Reserve, European Central Bank, and Bank of England have opted to hold interest rates steady as they assess the situation. Yet the report cautioned that prolonged energy price increases could entrench inflation, while tighter monetary policy risks compounding economic slowdown and market instability.
Uneven impact
The burden of the crisis is expected to fall unevenly. European economies, already grappling with energy dependency shifts, face limited fiscal space to shield households and businesses. Asian importers such as South Korea and Taiwan remain heavily reliant on Middle Eastern energy flows, while developing countries confront rising food insecurity and declining remittances.
Although the United States is a net energy exporter, it is not immune. The report noted that higher global prices and increased domestic demand, particularly from energy-
Enduring global disruption
The Financial Times concluded that even if the conflict were to end in the near term, the long-
As the war persists, the report suggests, the global economy is entering a period of sustained uncertainty marked by volatile energy markets, fragile supply chains, and heightened geopolitical risk.