Qatar warns war shock still lies ahead

Qatar’s finance minister has warned that the world economy faces a far sharper hit from the Middle East conflict than markets have yet absorbed, saying the oil-price surge seen so far is only an early sign of wider damage that could spread through energy, food and industrial supply chains by May or June. Speaking at the IMF and World Bank spring meetings in Washington on Wednesday, Ali bin Ahmed Al Kuwari said the impact would reach far beyond Gulf producers and could soon turn from a price shock into a problem of physical availability.

Al Kuwari’s remarks landed as finance officials and economists were already hardening their warnings about the fallout from the conflict. The International Monetary Fund on Tuesday cut its global growth outlook and said the world was drifting towards a more adverse scenario in which oil stays around $100 a barrel this year and global growth weakens to 2.5%. Under the IMF’s most severe case, growth would fall to 2.0%, a level the Fund said would put the global economy close to recession.

The Qatari minister’s central argument was that the first-round move in crude prices understates the scale of disruption building underneath. He said the world could soon face shortages in energy supplies even where buyers can still afford higher prices, a distinction that matters for manufacturers, utilities and governments trying to plan around volatile markets. He also pointed to fertiliser risks, arguing that interruptions to output and trade from the region could affect planting seasons and spill into food markets. That echoes concerns expressed by IMF Managing Director Kristalina Georgieva, who said supply disruptions would not disappear quickly even if fighting stopped, because shipping bottlenecks and rerouting delays would continue to affect import-dependent economies.

Markets have shown some scepticism that the worst outcomes will materialise, with Brent crude trading below the peaks reached after the conflict escalated. On Thursday, Brent was around $94.67 a barrel while US crude stood near $91.43, reflecting a measure of hope that diplomacy might ease pressure on the Strait of Hormuz. Yet Reuters reported that analysts remain doubtful peace efforts will rapidly restore normal flows, and the IMF has made clear that its baseline forecast assumed a short conflict and a decline in prices later this year. That leaves a clear gap between official downside warnings and a market still pricing in a relatively quick easing of tensions.

Much of that risk turns on the Strait of Hormuz, one of the world’s most important energy corridors. IMF officials have warned that continued disruption there would threaten energy security, supply chains and financial stability even if hostilities do not intensify further. A joint statement issued on Wednesday by finance ministers from Britain, Japan, Australia and several European countries called for the ceasefire to be fully implemented, saying renewed fighting or continuing disruption in Hormuz would create serious additional risks for the global economy. Their statement also underlined a second-order concern now growing in policy circles: even after a durable resolution, the effects on inflation, growth and markets may linger.

For Qatar, the warning carries extra weight because the country sits at the centre of global gas and helium trade. Al Kuwari said Doha had enough financial resilience to withstand the present crisis for at least a year, citing sovereign buffers and macroeconomic discipline, but he also acknowledged that short-term projections had been hit by the regional turmoil. The IMF’s latest outlook projected a sharp contraction in Qatar’s economy this year under its conflict assumptions, while other reporting has pointed to damage and prolonged disruption around the Ras Laffan LNG hub, a crucial node in world gas supply.

The broader policy debate in Washington has shifted from whether governments should shield consumers from the shock to how they should do so without worsening it. IMF fiscal officials have urged countries not to repeat the broad-based fuel subsidies seen in earlier crises, arguing that suppressing price signals would only keep demand higher and prolong the squeeze. Instead, the Fund is recommending targeted and temporary support for vulnerable households while governments preserve fiscal room. Global public debt reached 93.9% of GDP in 2025, the IMF said, leaving less capacity for sweeping rescue packages if the energy shock deepens.