OECD warns soaring energy costs will curb global growth as Hormuz blockade lingers

The OECD is set to publish its interim economic outlook on Wednesday, framing the analysis around the worldwide energy crisis sparked by the continuing Middle-East conflict. In its June outlook the agency already flagged that the war had become the dominant factor shaping global prospects, with energy, agricultural and industrial input prices soaring since February as production and exports from the Persian Gulf fell. Those price spikes have fed inflation, weakened real wages and forced a downward revision of GDP growth expectations for the United States, China and Europe, while Mexico and Germany are expected to achieve modest expansions through 2027.

The report outlines two scenarios: a limited-disruption case where growth slows modestly before a tentative rebound, and a prolonged-disruption case that would hit energy-importing Asian economies hardest, raise inflation further and compel central banks to tighten policy. Parallel diplomatic talks, including a recent meeting between Emmanuel Macron and the U.S. president in New York, have raised the prospect of reopening the Strait of Hormuz, a chokepoint that carries about 20 % of global oil trade and whose blockage by Iran has amplified market pressures. The OECD warns that any extended closure would deepen supply shortages, elevate financing costs and strain confidence worldwide.