Oil & Gas

The International Monetary Fund (IMF) has downgraded its global economic outlook, warning that the world could slide toward recession if the Iran war continues. In its April 2026 World Economic Outlook, the IMF now projects global GDP growth at 3.1% for the year, down from an earlier estimate of 3.4%, assuming the conflict is short-lived and oil prices stabilize around $82 per barrel. However, if tensions persist and oil averages $100 per barrel, growth could slow to 2.5%, and in a worst-case scenario of prolonged conflict and infrastructure damage, expansion could fall to just 2.0%, bringing the global economy close to recession.

Among major economies, the outlook varies considerably. The United States is expected to remain resilient, with growth forecast at 2.3% in 2026, supported by strong investment in artificial intelligence and recent tax cuts. Massive spending by major technology firms on AI infrastructure, including data centers and advanced semiconductor production, is reshaping the U.S. economy and acting as a key growth driver. These investments are expected to contribute significantly to GDP expansion, highlighting the transformative impact of AI on economic activity.

China, on the other hand, faces a more challenging outlook, with growth projections reduced to 4.4% in 2026 and 4.0% in 2027. Higher energy costs and disruptions linked to tensions in the Strait of Hormuz are raising production and logistics expenses for Chinese industries, particularly in manufacturing and petrochemicals. These cost pressures are difficult to pass on to consumers, potentially weakening export competitiveness and narrowing trade surpluses. Still, China retains some buffers, including large petroleum reserves, strong fiscal control, and rapid development of renewable energy.

In contrast, India stands out as a relatively strong performer, with growth slightly upgraded to 6.5% due to resilient domestic demand and improved trade conditions following reduced U.S. tariffs. Meanwhile, the Eurozone’s growth forecast has been trimmed to 1.1% due to heavy reliance on energy imports and rising gas prices triggered by the conflict. Saudi Arabia and the broader Middle East and North Africa region have also seen sharp downgrades, largely due to disruptions in oil exports and damage to key infrastructure, with the conflict expected to significantly weigh on regional economic performance.