The International Monetary Fund, World Bank, and World Food Programme warned Wednesday that the war in the Middle East is worsening global food-security risks, saying the conflict has already caused one of the biggest disruptions to energy markets in modern history, driving up oil, natural gas, and fertilizer prices.
In a joint statement following a meeting to discuss the war’s impact, the three institutions said those shocks, combined with transport bottlenecks, are likely to push food prices higher and deepen insecurity, especially in low-income countries that rely heavily on imports and already face tight budgets and heavy debt loads.
Their warning comes after the U.S. and Iran reached an apparent two-week ceasefire, under which bombing would pause and Iran would reopen the Strait of Hormuz to shipping. The truce followed more than a month of war that began on Feb. 28, when the U.S. and Israel launched strikes on Iran. Even with the ceasefire, the agreement is widely seen as fragile, and violence elsewhere in the region has continued.
The conflict’s economic impact has been severe because the Persian Gulf and the Strait of Hormuz are central to global flows of oil, gas, and fertilizer. Fertilizer has been a particular concern because the Middle East accounts for a large share of seaborne urea trade, meaning prolonged disruption can quickly filter through to crop input costs and, ultimately, food prices.
The ceasefire has brought some immediate market relief, with oil prices falling sharply Wednesday as traders bet that energy flows may partially normalize. But the IMF, World Bank and WFP made clear that the broader danger has not passed. They said the burden of higher fuel and food costs will fall most heavily on the world’s most vulnerable populations and pledged to coordinate their response to help protect lives, livelihoods, and longer-term economic stability.
Click here to see more...