In its Economic Outlook report published in June, the OECD projected global growth to slow from 3.4% in 2025 to 2.8% in 2026, then recovering to 3.1% in 2027. The forecast assumes that current disruptions ease and energy prices begin to stabilise by the middle of this year.
The OECD’s baseline scenario is built on the assumption that a peace agreement is reached and disruptions in the Strait of Hormuz are resolved relatively quickly.
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However, the organisation cautioned that a prolonged conflict would have far more severe consequences. Under a scenario where shipping disruptions and damage to energy infrastructure continue into 2027, global growth could slow to 2.1% in 2026 and 1.8% in 2027.
OECD Chief Economist Stefano Scarpetta said such an outcome would leave some economies either in recession or close to it.
The report examined the impact of disruptions in the Strait of Hormuz and damage to Gulf energy infrastructure, noting that both have driven up energy prices and increased costs for fertilisers and other industrial inputs. It added that the economic effects of the conflict are likely to linger even after hostilities end.
Scarpetta said a lasting peace settlement would not only reduce regional tensions but also help address the broader economic disruptions caused by the conflict.
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“The longer the disruptions last, the larger the economic and social costs become,” he said.
The OECD estimates that, in the prolonged-disruption scenario, global inflation would rise by 0.4 percentage points in 2026 and by 1.3 percentage points in 2027.
It also warned that higher unemployment, weaker investment and increased financial market risks could follow. Investment in energy-intensive sectors, including artificial intelligence infrastructure, would be particularly vulnerable.
According to the OECD, developing economies could face the greatest challenges because of their dependence on imported energy, limited fiscal capacity, weaker social safety nets and more fragile currencies.
The organisation said the outlook would further complicate policymaking for central banks already grappling with slower growth and inflationary pressures.
The report also highlighted the risks of relying heavily on a single energy chokepoint and called for stronger supply-chain resilience and greater diversification of energy sources.
In the near term, the OECD said coordinated use of strategic energy reserves and measures to curb demand could help soften the impact of supply disruptions. It added that reducing dependence on fossil fuel imports through increased investment has become more urgent than ever.