Asian and African countries highly dependent on imported oil are already facing mounting difficulties in securing supplies even at elevated prices, IMF noted.
"All roads lead to higher prices and a slowdown in economic growth."
The ultimate damage to supply chains and infrastructure depends on whether the conflict is long or short, while "the world may get stuck somewhere in the middle — tensions persist, energy remains expensive, and the fight against inflation proves difficult — amid sustained uncertainty and geopolitical risk."
Furthermore, rising food and fertilizer prices, in particular, are affecting some Middle Eastern and Latin American countries, and low-income economies face food insecurity, IMF wrote.
Populations in low-income countries are most at risk in the event of food price spikes, as food accounts for an average of about 36% of their expenses, compared to 26% in emerging markets and 9% in advanced economies, the fund's economists state.
"In this regard, any spike in fertilizer and food prices is not only an economic issue but also a sociopolitical one, especially where fiscal resources to cushion the blow are limited," the economists predicted.
U.S. President Donald Trump issued a 48-hour ultimatum to Iran to open the Strait of Hormuz on March 22, 2026, threatening strikes on Iranian power plants in case of refusal, as previously reported.
He instructed Pentagon to postpone strikes on Iranian power plants and energy infrastructure for five days on March 23, 2026.
Oil prices showed growth on the morning of March 23 as investors analyzed escalating U.S. and Iranian threats against energy facilities amid millions of barrels of Iranian oil entering the market following Washington's temporary lifting of sanctions.
Brent crude futures rose 65 cents to $112.84 a barrel. U.S. West Texas Intermediate crude increased by 84 cents, reaching $98.75 a barrel.