A ship sails through the Strait of Hormuz near the beach in Bandar Abbas, Iran, June 17, 2026.
Amirhossein Kholgoy | Reuters
Early signs that the Strait of Hormuz is reopening has eased the most serious threat to global energy supplies, but analysts have warned that the economic damage from nearly four months of war will take months to recover.
The United States and Iran signed a memorandum of understanding on Thursday to open the Strait of Hormuz and end a war that has disrupted global energy supply chains, boosted inflation and depressed growth prospects.
But Simon McAdam, deputy chief global economist at Capital Economics, said in a note this week that even if shipping across the Strait normalizes, high inflation is already largely “ingrained” in many countries.
“It can take months for energy and fertilizer price increases to pass through the food supply chain to end consumers,” McAdam said. He said the price of natural gas piped into homes typically lags the upstream market by about three months.
Oil prices on Friday fell to around $80 a barrel from a high of $118 in March at the height of the war. Goldman Sachs on Tuesday cut its oil price forecast, expecting Brent to average $80 in late 2026 and $75 in 2027, citing Persian Gulf oil flows recovering faster than expected.
Rising energy costs and upstream supply disruptions will likely take much longer to impact the downstream food and energy sectors. The backlog of ships waiting to transit the Strait of Hormuz could further delay the full recovery of cargo flows.
The World Bank last week cut its global economic growth forecast to 2.5%, the slowest pace since the pandemic, but expects global inflation to rise to 4% this year from 3.3% in 2025, even if disruptions to oil distribution ease in coming weeks.
The report said fertilizer prices could rise by up to 38% this year as supply disruptions and shortages of key inputs from the Gulf spill over into agricultural markets.
McAdam said Europe could face particular pressure as natural gas storage levels remain historically low, and predicted that inflation in Europe and Japan would rise another 3-4 percentage points as the price of U.S. liquefied natural gas exports rises.
Last week, the European Central Bank became the first major central bank to raise interest rates, marking the first tightening in nearly three years.
Meanwhile, the Fed, under new Chairman Kevin Warsh, kept short-term interest rates unchanged on Wednesday, but raised its forecast for consumer spending inflation to 3.6% through December from the 2.7% expected in March. Nine of the 18 voting members predict at least one rate hike by the end of this year.
This trajectory highlights how the Hormuz crisis has changed the calculus of central banks trying to balance slowing growth and rising inflation.
The Bank of England also kept interest rates unchanged, but warned that “even if the dispute is resolved quickly, there may be logistical delays in the recovery of energy production and transport.”
If everyone has a certain level of buffer during times of peace, it will provide a buffer even in the event of a global emergency.
Mateo Lanzafarme
Asian Development Bank Director
Alex Holmes, regional director at the Economist Intelligence Unit, said central banks are unlikely to change course anytime soon after taking a hawkish stance, with fuel prices and inflation expected to remain high. He said food inflation was also facing further pressure as Super El Niño threatens agricultural production in the coming months.
The crisis has also prompted governments to rethink their energy security strategies. Countries affected by the disruption are expected to strengthen their energy reserves, direct resources to expanding domestic production, and pursue alternative supply routes to reduce dependence on a single chokepoint.
“If everyone can have some level of cushioning in normal times, it will also cushion them against global contingencies,” Matteo Lanzafame, director of the Asian Development Bank, said at a virtual event on Thursday.
