Tensions in the Middle East escalated on Saturday as Iran announced the closure of the Strait of Hormuz, accusing the United States of violating prior agreements amid a continuing naval blockade.  

IMF to Downgrade Global Economic Growth Project as U.S.-Iran Conflict Lingers The International Monetary Fund (IMF) says it will downgrade global growth projections as escalating tensions between the United States and Iran continue to disrupt economic activity and delay a return to pre-war price levels. IMF Managing Director Kristalina Georgieva said the conflict is creating “asymmetric shocks” across economies, warning that prices will not quickly return to pre-war levels. “We are going to have a downgrade, and the size of this downgrade will depend on duration and speed with which everything can come back to the same level of production,” she explained. She noted that even if a ceasefire holds, recovery will be uneven, with some regions stabilising faster than others, prolonging inflationary pressures and complicating central bank responses. Concerns deepened after President Donald Trump announced a full naval blockade of the Strait of Hormuz, a critical oil shipping route, raising fears of fresh supply disruptions and volatility in global markets. Trump said the blockade was necessary after talks with Iran in Pakistan failed, citing Tehran’s refusal to abandon its nuclear ambitions. “Effective immediately, the United States Navy… will begin the process of blockading any and all ships trying to enter or leave the Strait of Hormuz,” he declared. The move has cast doubt on the sustainability of last week’s ceasefire and dimmed hopes for a lasting resolution, with analysts warning of further energy price spikes. Earlier, the World Bank cut its 2026 growth forecast for Sub-Saharan Africa by 0.3 percentage points to 4.1%, citing rising fuel and fertilizer costs and heavy debt burdens linked to the Iran war. Global policymakers now fear the conflict could derail fragile recovery efforts, particularly in emerging markets already struggling with high costs and supply chain disruptions.

The International Air Transport Association (IATA) has warned that global jet fuel supply may take months to recover even if the Strait of Hormuz reopens under the US‑Iran ceasefire agreement.

The average price of gasoline in the United States has surged to $4 per gallon, marking the first time fuel costs have reached that level since 2022, according to a report by CNN on Tuesday.

Saudi Arabia’s oil officials are privately warning that crude prices could surge beyond $180 per barrel if disruptions to global energy supplies caused by the Iran war persist past late April.

Global financial markets faced a seismic shock on Monday as the intensification of the conflict between the United States, Israel and Iran sent crude oil prices soaring above $120 per barrel.