Why the Strait of Hormuz has become the world’s biggest economic risk

The strongest common thread in this week’s economic warnings is not simply higher oil prices. It is the growing view that the Strait of Hormuz has become the single biggest external risk to global stability in 2026. The concern now runs across multilateral institutions, central market forecasts and corporate energy leaders. The Organisation for Economic Co-operation and Development (OECD) said, that the Iran war had erased what would likely have been an upgrade to global growth. It kept its 2026 global growth forecast at 2.9%, but said that in an adverse scenario, world growth would be 0.5 percentage points lower by the second year of the shock and inflation would be 0.9 points higher. The IMF sees inflation risk rising fast The International Monetary Fund (IMF) has delivered a similar warning, but in simpler macro terms. In a March 9 speech, Managing Director Kristalina Georgieva said that every 10% increase in oil prices, if it lasts through most of this year, would add 40 basis points to global headline inflation and cut global output by 0.1% to 0.2%. She also linked the risk directly to Hormuz. Georgieva said shipping traffic through the strait had fallen by 90% and warned policymakers to “think of the unthinkable and prepare for it.” The IEA calls it the biggest oil supply disruption on record The International Energy Agency (IEA) has used even stronger language. In its March Oil Market Report, the IEA said the war in the Middle East is creating “the largest supply disruption in the history of the global oil market.” It said crude and product flows through Hormuz had fallen from around 20 million barrels a day before the war to a trickle, with Gulf producers cutting total oil production by at least 10 million barrels a day. The IEA also said global oil supply is projected to plunge by 8 million barrels a day in March, and that export flows through the strait are near a standstill. That is why member countries agreed on March 11 to release 400 million barrels fr