IMF: Iran War Could Drag Global Growth to Weakest Since Pandemic

The IMF warns that sustained $100-per-barrel oil driven by the Iran conflict could slow global economic growth to just 2.5% — the weakest expansion since the pandemic.

The International Monetary Fund has warned that the Iran war could drag global economic growth down to 2.5% under an adverse scenario of persistently elevated oil prices at $100 per barrel — a level not seen since the 2022 energy crisis and the weakest pace of global expansion since the Covid-19 pandemic.

The IMF's base case already reflects a significant downgrade, but the adverse scenario assumes the Strait of Hormuz disruption continues to suppress Gulf oil output and drive freight costs higher for an extended period. Energy-importing economies in Asia, Europe, and sub-Saharan Africa would bear the greatest burden, while oil-exporting nations face their own supply-side constraints from the conflict.

For shipping markets, the IMF warning underscores a deepening paradox: tanker freight rates on routes bypassing Hormuz — particularly Cape of Good Hope diversions — have surged, but overall seaborne trade volumes are falling as demand destruction takes hold. TankerMap data tracking over 4,100 tankers globally reflects this divergence, with active VLCCs repositioning away from the Gulf even as spot rates on alternative routes climb.