Middle East war raises risk of a 2026 global trade slowdown

In short: The ongoing war in the Middle East is increasing the risk that global trade slows further in 2026, mainly by disrupting key shipping routes and pushing up energy prices.

What's going on

The conflict has entered its third week as of March 18, 2026, and analysts say it could hit global trade if it continues. A key concern is the Strait of Hormuz, a narrow sea route used by oil and gas tankers, like a choke point on a busy highway.

Reports describe shipping delays there, including around 150 vessels anchored and waiting. Some insurers have reportedly canceled coverage, and insurance costs have jumped. That makes it harder and more expensive for ships to move.

The Strait of Hormuz handles about 20% of global oil and liquefied natural gas (LNG, natural gas cooled into a liquid so it can be shipped). Countries in Asia could be hit hardest, since Japan and South Korea rely on the Gulf for about 90% of their oil, and China and India rely on it for roughly 38% to 46%.

Higher fuel and shipping costs can spread through the economy. Reports also point to paused aviation routes and shipping interruptions at major hubs such as Dubai’s Jebel Ali port. There are signs of broader knock-on effects too, including delays and higher costs for materials like steel and aluminum.

What to watch

Energy prices are a major swing factor. Brent crude has jumped at points, and some estimates say a 10% oil price rise can add about 0.2 percentage points to inflation in parts of Asia. Some forecasts suggest the inflation hit in Europe and Asia could be limited to about 0.5 percentage points in 2026 if oil prices stabilize, but a longer conflict could still mean more supply problems and weaker trade.

Source: NYTimes