Not just oil: IMF warns Iran attacks could trigger global economic shock
Photo: Kristalina Georgieva, IMF Managing Director (Getty Images)
US strikes on Iran could trigger global economic consequences beyond just energy markets, says IMF Managing Director Kristalina Georgieva in an interview with Bloomberg.
"We are looking at this as another source of uncertainty in what has been a highly uncertain environment," she said.
So far, the main impact has been on energy prices, but secondary effects are also possible, particularly through downgraded growth forecasts in major economies.
Rising prices and recovery risks
On the morning of June 23, global oil benchmark Brent surged by 5.7% to $81.40 per barrel before retreating to $78.50 amid volatile trading.
The IMF had already lowered its global growth forecast in April, warning that the U.S.-led reordering of global trade would slow the economic recovery. Georgieva noted that data from the year's first two quarters confirmed this trend. While a recession remains unlikely, uncertainty remains high.
Iran's response and geopolitical stakes
The world is now bracing for Tehran's response to the unprecedented US airstrikes on its nuclear facilities. President Donald Trump's decision to deploy bunker-busting bombs has escalated tensions in the Middle East and increased geopolitical risks.
This comes on top of existing pressure on the global economy from trade disputes and supply chain uncertainties.
Energy risks and the oil market
In the short term, Georgieva said the IMF is closely monitoring changes in risk premiums on the oil and gas markets. Options trading volumes have surged, and the futures curve has shifted, reflecting fears of supply shortages.
"Let's see how events will develop," she added, noting that attention is focused on potential logistical disruptions and spillover risks for other countries.
"I pray no," Georgieva said.
US outlook and interest rates
Commenting on the US economy, Georgieva said the trend toward disinflation continues. However, she emphasized that current conditions do not yet allow the Federal Reserve to begin cutting interest rates.
"What we expect toward the end of the year is possibly for the Fed to apply judgment that the time may have come for some adjustment in interest rates downwards," she said.
She also pointed to the resilience of the US labor market and wage growth, which continue to support consumer demand.
Negative impact of instability
At the same time, Georgieva stressed that rising volatility has a dampening effect on business activity.
"When there is uncertainty, what happens? Investors don't invest, consumers don't consume, and that holds growth prospects down," the IMF chief summarized.
Strikes on Iran
On June 22, the US launched strikes on Iran, dropping 12-ton bunker-busting bombs on a mountain range above the Fordow nuclear site.
In response, Iran's parliament approved the closure of the Strait of Hormuz - one of the world's key energy chokepoints. Nearly a quarter of global oil shipments pass through this narrow waterway between Iran, Oman, and the UAE. A blockade could push oil prices above $100 per barrel.
