The heads of the International Energy Agency, International Monetary Fund and World Bank Group agreed to form a coordination group to maximize their response to the energy and economic impacts of the war in the Middle East.
The conflict has caused major disruptions to lives and livelihoods while triggering one of the largest supply shortages in global energy market history. According to a joint statement, the impact is global and highly asymmetric, disproportionately affecting energy importers and low-income countries. The crisis is being transmitted through higher oil, gas and fertilizer prices, which has triggered concerns about food security.
Global supply chains for commodities such as helium, phosphate and aluminum are affected. Tourism has also declined due to flight disruptions at key Gulf hubs. The resulting market volatility and weakening of emerging economy currencies raise the prospect of tighter monetary stances and weaker growth.
“At these times of high uncertainty, it is paramount that our institutions join forces to monitor developments, align analysis and coordinate support to policymakers to navigate this crisis,” the leaders said.
The new group will assess the severity of impacts across regions through coordinated data sharing on energy markets, trade flows, fiscal pressures and inflation trends. It will also coordinate a response mechanism that may include targeted policy advice, assessment of potential financing needs and the provision of financial support.
The organizations intend to mobilize other multilateral, regional and bilateral partners to deliver efficient support to countries in need. The group will draw on other international organizations’ expertise as needed.
“We are committed to working together to safeguard global economic and financial stability, strengthen energy security and support affected countries and people on their path to sustained recovery, growth and job creation through reforms,” the statement said.
While the group focuses on global stability, specific regional impacts are being monitored. For instance, some emerging markets have seen local costs fluctuate, as inflation expectations rise. Analysts note that fuel price hikes of 10 percent or 15 percent in certain regions could stall recovery efforts.
The joint effort aims to protect countries most exposed to downstream impacts and those facing limited policy space and high debt levels.
International Energy Agency executive director Fatih Birol, International Monetary Fund managing director Kristalina Georgieva and World Bank Group president Ajay Banga expressed a unified commitment to navigating the high levels of uncertainty.
