War in the Middle East: Global Economic Consequences

Here are the latest global economic developments on Thursday around 04:00 GMT, as the Middle East war enters its 27th day.

– Oil prices rise, Stocks uneventful Oil prices are up on Thursday while Asian stocks are slightly down on the 27th day of the war. By 03:30 GMT, Brent was up 1.7% at $103.99 per barrel and WTI up 1.6% at $91.81.

The Hang Seng index in Hong Kong fell by 1.5% and the Nikkei by 0.17%, while the Shanghai composite index lost 0.57%. Gold dropped by 1.14% to $4,506.86 per ounce.

– Russian oil for the Philippines A ship carrying over 700,000 barrels of Russian crude oil has arrived in the Philippines, according to a source close to the matter. The country declared an “energy emergency” due to the war.

– Japan taps into reserves again Japan has announced the use of a new portion of its strategic petroleum reserves, after starting to deplete storage equivalent to 15 days of private sector oil reserves last week. The volume of this new withdrawal was not specified.

– Bank of France less optimistic The Bank of France has reduced its growth forecasts for 2026 and 2027 due to rising energy prices and deteriorating geopolitical conditions. The forecast for French GDP growth in 2026 is 0.9%, down from the 1% anticipated in December.

– Iran: Defense industry crippled “Two-thirds of Iranian drone and missile manufacturing capabilities, as well as shipyards, have been damaged or destroyed by the United States,” said Admiral Brad Cooper, head of the US Central Command for the Middle East.

– United States: Easing restrictions on gasoline The US government has relaxed environmental restrictions on a fuel in an effort to lower pump prices. The EPA chief, Lee Zeldin, explained that a temporary emergency waiver was issued for E15 gasoline (85% oil, 15% ethanol), which is cheaper.

The sale of this gasoline is typically restricted during the summer due to its impact on ozone levels and air pollution. However, waivers have been granted annually since 2022.

– French chemistry sector concerned France Chimie federation is worried about “cascading effects” due to energy price hikes and scarcity of certain components like helium, with concerns about “shortages for European chemistry.”

– Risk of recession in Italy Italy has already lost 0.2 percentage points of growth due to the war and may slip into recession if it continues, according to the research center of the Italian employers’ organization Confindustria.

– French airports fear decline in activity French airports are concerned about a drop in activity due to the war and oil price surge, following a 2025 year of “decoupling” from the European trend. The kerosene price has doubled since February 28, posing a challenge for airlines.

– Berlin criticizes Trump’s “bad policy” The German Finance Minister has criticized US President Donald Trump’s policy in Iran, warning of a new economic shock. He also called out oil companies for taking advantage of the situation.

“We are facing a significant geo-economic shock for the second time in four years,” lamented Lars Klingbeil, who is also the Vice Chancellor.

Published on March 26 at 04:59 GMT, AFP.