WTO Warns of Global Trade Deceleration as Iran Conflict Threatens Recovery

The World Trade Organization warns global merchandise growth will drop to 1.9% in 2026, as Middle East conflict energy spikes and transport disruptions weigh on the recovery.

By: AXL Media

Published: Mar 19, 2026, 12:04 PM EDT

Source: Reuters

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The WTO’s updated outlook suggests that the geopolitical crisis in the Middle East is actively eroding the resilience of global supply chains. Director-General Ngozi Okonjo-Iweala noted that sustained energy price hikes could shave 0.5 percentage points off total merchandise growth. The impact is particularly acute for fuel-reliant importers in Asia and Europe.

Energy Costs: High oil and LNG prices are acting as a tax on global consumption and production.

Services Sector: Trade in services is expected to drop from a projected 4.8% growth to 4.1% as flight and shipping disruptions escalate.

Strait of Hormuz: A prolonged blockade by Iran poses a critical threat to the fertilizer market, specifically urea imports. This risks triggering food security crises in major agricultural producers like Brazil, India, and Thailand.

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