In Search of Peace, Stability in a Fragile World

Obinna Chima

The conflict that sparked across the Middle East after the United States and Israel launched wide-ranging strikes on Iran, killing the country’s supreme leader on February 28, is a stark reminder of the far-reaching spillovers of violent conflict in today’s integrated global economy.

Beyond the suffering of those in countries directly affected, the full-blown conflict has further destabilised the global economy — from food to fertilizer.  Between increasing oil prices, exports caught in the bottleneck or delayed caused by the closure of the Strait of Hormuz, which was reopened yesterday, and widespread security concerns throughout the Middle East, many of these consequences have had a ripple effect on nearly every aspect of daily life for households and economies around the world.

The war, which has shown that the world is much more interconnected, has seen global leaders attending the ongoing Spring Meetings of the International Monetary Fund (IMF) and World Bank in Washington DC, United States, calling for peace to achieve stability and restore confidence, while seeking coordinated policy responses to contain the mounting economic fallout.

The IMF warned that the world may be headed for a global recession if energy and supply disruptions due to the war drag on.

“A longer or broader conflict, worsening geopolitical fragmentation, a reassessment of expectations surrounding artificial‑intelligence‑driven productivity, or renewed trade tensions could significantly weaken growth and destabilise financial markets,” the IMF said in its latest report.

Global oil supply plummeted by 10.1 million barrels a day in March, “the largest disruption in history,” the International Energy Agency (IEA) revealed in its latest oil market report.

The IEA has sharply downgraded its forecast for global oil supply, which it now expects to exceed demand by just 441,000 barrels a day, versus 2.4 million barrels a day in its March report.

The IMF now expects global growth of 3.1 percent in 2026, a 0.2 percentage point downgrade from its January forecast. This modest revision assumes that the war will be “relatively short-lived,” it said. Global inflation is also seen rising to 4.4 percent this year.

IMF Managing Director, Kristalina Georgieva, warned of deepening supply disruptions from the closure of the Strait of Hormuz, saying that the war can trigger new demand for $20 billion to $50 billion in financial support that could include new loans and augmentation of some of the global lender’s 39 existing country financing programmes.

She said the disruptions to oil supplies are “not going to evaporate overnight, even if the war ends tomorrow. Why? Because a tanker is a slow-moving vessel, it would take 40 days to get all the way to Fiji. So we need to be prepared that the impact of the supply disruptions in the weeks ahead is going to be deeper.”

Georgieva added: “Had we not had this war, we would have seen one small upgrade of our growth projections. Instead, all roads now lead to higher prices and slower growth.”

Also, World Bank President, Ajay Banga, in reflecting on the impact of the conflict, said, “It’ll still take a few months for things to come back to where they were.”

“So we have to prepare for a few months of some destabilization for these countries,” he said.

Banga said the World Bank has prepared a “war chest” plan to provide countries with varying levels of funding, depending on how long the conflict drags on.

“Thanks to our crisis toolkit, our countries can get about $20 to $25 billion immediate access, like literally tomorrow morning, without new approvals,” he said.

If the war continues for the next five or six months, that figure could rise to $60 billion, he said.

Equally, Finance chiefs from the Group of Seven industrial powers agreed to do everything possible to stabilise the global economy amid considerable uncertainty brought on by the war.

Japanese Finance Minister Satsuki Katayama told reporters in Washington that many central bankers appeared to favor a wait-and-see stance on monetary policy.

She said, “I believe there was a shared understanding that we need to do our best to defuse the situation, including ensuring freedom of navigation in the Strait of Hormuz.”

Ultimately, this crisis reinforces the fact that there can be no lasting economic stability without geopolitical peace. The real challenge today is to move beyond statements and take coordinated, decisive actions to contain the fallout. The longer the conflict persists, the deeper the strain on already fragile economies and vulnerable populations. In an interconnected world, the price of war is no longer confined to borders as it is global, immediate, and increasingly difficult to contain.