There will be lasting economic “scars” and fuel shortages even after Iran war— IMF warns

The International Monetary Fund (IMF) has issued a stark warning that global fuel shortages specifically involving diesel and jet fuel, are likely to persist for the foreseeable future. 

Despite the announcement of a tentative ceasefire between the United States and Iran, the strategic Strait of Hormuz remains effectively closed to significant energy traffic, causing what IMF Managing Director Kristalina Georgieva describes as lasting “scars” on the global economy.

Under normal conditions, the Strait facilitates the passage of approximately 25% of the world’s seaborne crude oil and 20% of global LNG shipments. However, current data suggests that less than 10% of pre-war transit volume is currently making it through the waterway. 

While a two-week truce was brokered by Pakistan on April 7, the maritime route remains a bottleneck, with reports indicating that only bulk carriers with dry cargo are being permitted through by Iranian authorities.

The IMF confirmed that it will revise its 2026 global growth forecasts downward in its upcoming World Outlook report. Prior to the conflict, the organization had projected a growth rate of 3.3% for the year, but Georgieva noted that “even our most hopeful scenario now involves a growth downgrade.”

 The conflict has already reduced global oil supplies by an estimated 13% and LNG supplies by 20%, triggering a negative supply shock that is pushing inflation higher and straining global supply chains.

To stabilize the economies most affected by the hostilities, the IMF has announced plans to provide up to $50 billion in emergency financial assistance. The fund has already received numerous requests for balance-of-payments support from vulnerable, energy-importing nations that lack the fiscal buffers to absorb the sudden spike in energy costs.

Energy markets have remained highly volatile throughout the morning. While Brent crude prices sat at approximately $95.86 per barrel on Friday, down from a conflict peak of $120—they remain significantly elevated compared to pre-war levels. In the United Kingdom, North Sea oil prices recently hit record highs, with Forties Blend reaching nearly $147 as the market reacts to the continued uncertainty in the Middle East.
 

Georgieva cautioned that even if a permanent peace deal is reached, there will be no “neat and clean return to the status quo.”

 Beyond energy, the conflict is beginning to impact food security for an estimated 45 million additional people due to rising fertilizer costs and transport disruptions. The IMF has urged governments to adopt defensive strategies, such as strengthening fiscal buffers and allowing for currency flexibility, to navigate the ongoing crisis.