The US-Iran conflict could cause oil prices to soar to $125! IMF warns: Global inflation will break 6% by 2026

Escalation of the Iran-U.S. conflict threatens the Strait of Hormuz, and the IMF warns that oil prices could surge to $125 per barrel. Prolonged fighting would slow global growth to 2.2% and push inflation above 6%.

Middle East conflict intensifies supply chain disruptions, risk of soaring oil prices emerges

As the conflict between the United States and Iran continues to escalate, the global energy market faces severe turmoil. IMF Managing Director Kristalina Georgieva warns that if the fighting continues and affects key transportation corridors, international oil prices could climb to $125 per barrel, delivering far-reaching impacts on the global economy.

At present, market attention is focused on shipping risks in the Strait of Hormuz. In the past, this waterway carried about 20% of global crude oil supplies. Once it is blocked, supply disruptions will immediately occur. Energy companies and analysts say signs of tightening supply have gradually started to appear, and Asian markets may be the first to feel the pressure from an economic slowdown.

Meanwhile, policy changes in some oil-producing countries are also emerging, further worsening market uncertainty and making it difficult to ease upward pressure on energy prices in the short term.

IMF raises risk scenarios; inflation could break 6% as growth slows in tandem

The IMF’s latest assessment shows that the previously expected “short-term conflict” scenario is no longer valid, and the global economy is gradually shifting onto a more severe risk path. In a pessimistic scenario, global economic growth in 2026 could fall to around 2% to 2.2%, while inflation would rise to above 6%.

Even under a moderate risk scenario, inflation could still reach 5.4%, indicating that pricing pressures have begun to spread. Georgieva notes that as time goes on, market expectations for inflation may gradually lose stability, further amplifying economic volatility.

In addition, supply chain shocks are gradually becoming apparent: fertilizer prices are rising by about 30% to 40%. It is expected to drive food prices up by approximately 3% to 6%, with especially clear effects on emerging markets and countries that rely on imports.

High oil prices suppress monetary easing; rate-cut expectations cool as the Fed turns cautious

Market data shows that amid high oil prices and inflation pressure, the room for monetary policy to turn toward easing is rapidly shrinking. The probability of the U.S. Federal Reserve cutting rates in 2026 has been sharply revised downward; some market forecasts suggest the probability of a rate cut at the June meeting is only about 2%, while the probability of holding rates steady in July is as high as 88% or more.

Analysts say energy prices and geopolitical risk are driving policy expectations. When inflationary pressure remains, central banks will find it difficult to stimulate the economy through rate cuts and may instead choose to maintain tightening or adopt a wait-and-see stance.

Such a policy environment could also trigger chain reactions in capital markets, including rising stock valuation pressures and increased volatility in risk assets.

Geopolitical and economic risks intertwine, pushing global markets into a highly uncertain period

The IMF emphasizes that the current situation is not only an energy issue, but a comprehensive economic risk. Prolonged war will simultaneously affect supply chains, inflation, financial conditions, and investment confidence, creating multiple layers of pressure.

Georgieva says bluntly that if legislative bodies continue to assume the conflict will end in the short term, they may underestimate the risks and adopt wrong policies. She calls on countries to adjust demand in the event of supply reductions to avoid further pushing prices higher.

In the future, markets will closely watch three major variables, including whether the Iran-U.S. conflict escalates, whether energy supplies recover, and how central banks in different countries respond to inflation. Amid multiple uncertainties, the global economy’s path in 2026 is entering a critical turning point.

This article is compiled by Crypto Agent from information from multiple parties, and is reviewed and edited by Crypto City. It is still in the training stage; there may be logical biases or information errors. The content is for reference only and should not be regarded as investment advice.