Gulf to Globe: Hormuz closure sends oil past $114 as experts warn of global growth shock

Washington, DC — Oil prices have jumped with US crude surpassing $114 a barrel, after President Donald Trump set a Tuesday deadline for Iran to reopen the Strait of Hormuz or face attacks on its power infrastructure.

On Sunday, US crude rose 2.35% to $114.16 per barrel, while Brent crude gained 1.72% to $110.91.

Trump, in a social media post laden with explicit language, warned that Iran would be “living in Hell” if the Strait remained closed. He also threatened strikes on the country’s power plants and bridges, later posting only: “Tuesday, 8:00 P.M. Eastern Time!” without further detail.

Last week, the International Monetary Fund (IMF) issued a strong warning that the ongoing war in Iran could slow economic growth worldwide.

In simple terms, the Washington-based organisation says that if the fighting continues to disrupt supplies of oil, natural gas, and fertiliser from the Gulf region, ordinary people in many countries will face higher costs for fuel, heating, and food with effects that could last for years.

IMF’s message serves as a reminder of the wider costs of the war, which began with US and Israeli strikes against Iran on 28 February 2026 and has now entered its fifth week.

Maximo Torero, Chief Economist at the UN Food and Agriculture Organisation (FAO) warns that the collapse in tanker traffic through the Strait of Hormuz is creating one of the most severe shocks to global commodity flows in recent years.

Torero points to risks to food security and agricultural production because of higher fertilizer and energy costs.

“The ongoing disruption to the Strait of Hormuz trade corridor is triggering one of the most severe shocks to global commodity flows in recent years, with significant implications for food security, agricultural production, and global markets.”

How Iran war is hitting global supplies

Roughly one-fifth of global oil and a significant share of natural gas pass through the Strait of Hormuz. About a third of the world’s seaborne fertiliser trade, materials that farmers use to grow crops, also travels through the area.

When conflict disrupts these routes, tankers and cargo ships struggle to move goods safely. This leads to shortages and higher prices. Even countries far away from the fighting feel the impact because the global economy is connected.

Higher fertiliser costs make it more expensive for farmers to produce food, which eventually pushes up the price of bread, rice, vegetables, and other groceries in shops.

Mark Zandi, chief economist at Moody’s Analytics, warns about the direct hit to ordinary people.

“Consumers threaten to be hammered by the surge in oil prices, which has already lifted the cost of a gallon of gas. Inflation will quickly accelerate, cutting into consumers’ purchasing power, and hitting consumer spending, GDP and jobs.”

Zandi called higher oil prices “another negative supply shock, lifting inflation and hurting growth, putting the Fed in a no-win situation.”

Governments across Europe are now preparing for possible sharp rises in heating bills next winter and are considering extra subsidies or welfare support for families who struggle to pay.

The IMF explained the situation in straightforward terms: “A short conflict might send oil and gas prices soaring before markets adjust, while a long one could keep energy expensive and strain countries that rely on imports. Or the world may settle somewhere in between – tensions linger, energy stays costly, and inflation proves hard to tame – with ongoing uncertainty and geopolitical risk.”

It added: “Much depends on how long the conflict lasts, how far it spreads, and how much damage it inflicts on infrastructure and supply chains. Historically, sustained oil-price spikes have tended to push inflation higher and growth lower.”

Impact will vary by country

Some countries that produce and export oil and gas, such as the US, may actually benefit from higher energy prices in the short term because they earn more from selling those resources.

However, even in such places, ordinary families will pay more at the petrol pump, which can reduce living standards.

For many other nations, especially those that import most of their energy, the impact is more painful. Businesses may have to raise their own prices to cover higher fuel and transport costs.

This can lead to broader inflation, forcing central banks to consider raising interest rates, which makes borrowing more expensive for everyone.

The IMF report noted that the limited room to support struggling households and businesses could deepen and prolong the economic scars.

“All roads lead to higher prices and slower growth worldwide,” should the conflict in the Middle East continue to throttle the amount of oil, gas and fertiliser making its way out of the Gulf,” the IMF concluded.