While the International Monetary Fund (IMF) has seen energy and commodity prices fall since the US-Iran peace agreement to halt hostilities and reopen the Strait of Hormuz, as per the global monetary body, it will take time for prices and Gulf trade flows to normalize.
As per IMF spokesperson Julie Kozack, in its next update of its “World Economic Outlook” on July 8, the Fund will decide whether to continue with the three growth scenarios it presented in April 2026 that depend on Iran war outcomes.
As the Strait of Hormuz remained closed in May, keeping benchmark oil prices above USD 100 per barrel, Kozack saw the global economy moving away from the more benign “reference forecast,” which had assumed a quick end to the Iran war, to an “adverse scenario” with 2.5% global growth for 2026.
The adverse scenario assumed a full-year 2026 average oil price of USD 100 per barrel, apart from a tightening of financial conditions and rising inflation expectations.
“Inflationary expectations have been well anchored, as some central banks have moved to raise interest rates, and financial conditions have remained accommodative, with both advanced and emerging market countries able to access international financing markets,” Kozack said.
Benchmark Brent crude oil futures for August delivery traded around USD 73 a barrel on Thursday (June 25), their lowest level since before the February 28 start of the Iran war.
“Prices for urea, other fertilizers, and base metals had fallen with the resumption of shipments from Gulf countries, but it will take time for full normalization of prices and trade because of shipping lead times to final destinations,” Kozack remarked.
“So this means that there will be some time before we go back to a normal state, and of course that all assumes that the ceasefire remains in place,” the senior official continued.
She said the IMF is most concerned about the conflict’s impact on developing countries that are net energy importers with few fiscal reserves or stockpiles of oil and other commodities, especially in Africa.