Arabian Post Staff -Dubai
The appeal reflected growing alarm that government attempts to ringfence domestic supplies could worsen the very crisis policymakers are trying to contain. IMF Managing Director Kristalina Georgieva said the first principle should be to “do no harm”, warning that export restrictions would intensify an already severe imbalance. IEA Executive Director Fatih Birol said some countries were already holding back stocks and restricting flows, although he did not identify them. Their message was plain: keep energy moving to markets rather than trapping supplies behind national barriers.
Pressure on governments has mounted since the conflict that began on 28 February damaged more than 80 oil and gas facilities across the region and disrupted traffic through the Strait of Hormuz, a corridor that carries about a fifth of the world’s oil and liquefied natural gas. Reuters reported that the United States on Monday began enforcing a blockade of ships leaving Iran’s ports after weekend talks in Islamabad failed to produce a breakthrough. That added to supply anxiety even as some traders later looked to possible diplomacy as a route to easing the disruption.
Birol said the scale of the disruption was global and highly uneven, with net energy importers and lower-income countries most exposed. That concern is central to the line taken by the IMF and World Bank at their spring meetings, where officials are preparing downgraded growth forecasts and higher inflation projections. The World Bank’s baseline estimate for emerging market and developing economy growth in 2026 has slipped to 3.65% from 4% in its October outlook, while inflation in those economies is now seen at 4.9%, with worse outcomes possible if the conflict lasts longer.
Higher energy costs are also spilling into fertiliser prices and wider food systems, giving the warning added urgency for governments already under fiscal strain. The IMF has said about 45 million more people could face acute food insecurity if the conflict persists and fertiliser shipments continue to be disrupted. That raises the stakes for policymakers tempted to reach for blunt trade restrictions, price caps or broad subsidy schemes. Economists cited by Reuters have instead argued for temporary, targeted support for vulnerable households, saying wide-ranging intervention risks embedding inflation while doing little to repair supply chains.
The IEA has already moved to cushion the shock. Birol said the agency’s 32 members agreed last month to release 400 million barrels from emergency reserves, the largest coordinated drawdown on record, including 172 million barrels from the US Strategic Petroleum Reserve. He stressed that the release was designed to reduce immediate pain rather than solve the underlying shortage, and said the agency remained ready to act again if conditions deteriorated. He added that the 400 million barrels represented only a fifth of the reserves available to the group.
For the World Bank and IMF, the crisis is fast becoming a test of how multilateral institutions respond when geopolitics, inflation and debt distress collide. The IMF expects near-term emergency support demand of $20 billion to $50 billion from low-income and energy-importing countries. The World Bank has said it could mobilise about $25 billion quickly through crisis-response instruments and as much as $70 billion over six months if needed. Ajay Banga, president of the World Bank, has described the upheaval as a system-wide shock hitting countries that entered the crisis with thinner buffers and heavier debt loads than they had a few years ago.
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