Introduction to the Iran War’s Economic Impact

A man walks among buildings destroyed in a joint attack by Israel and the United States on April 6, 2026, in Tehran, Iran.

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Policymakers around the world are closely watching developments in the Middle East as they gauge the most prudent response to the economic fallout of the war. CNBC spoke to more than 30 central bankers, politicians, and policymakers at the IMF World Bank meetings in Washington, DC, this week, who weighed in on the U.S.-Iran war and their biggest economic concerns.

Economic Concerns and Uncertainty

The interviews came before Iran’s Friday declaration that the Strait of Hormuz is completely open to commercial traffic during the ceasefire between Israel and Lebanon, and its subsequent statement on Saturday that the key energy chokepoint was closed again because the U.S. had failed to meet its obligations.

U.S. President Donald Trump on Friday thanked Iran for opening the strait in a social media post. But Trump said the U.S. naval blockade of Iran’s ports will remain in effect until an agreement is reached with Tehran.

Pierre Gramegna, managing director of the European Stability Mechanism, told CNBC’s Karen Tso on the sidelines of the IMF World Bank meetings, “I’m being asked all the time now, is this war going to have a lot of impact? The first answer is, it has already had an impact. I mean, look at inflation rates in the last months. Look at what’s going on in our gas stations all over the world. The impact is obvious.”

Quoting the Colombian writer Gabriel García Márquez, Gramegna’s answer to whether the war and its impact will last was “it is easier to start a war than to end a war.” “To start a war, you don’t need to ask anybody, you’re on your own. But to end it you need to agree, bilaterally, multilaterally, and this uncertainty is weighing, obviously, on how we look at the future.”

Stagflation and Energy Security Concerns

Many of those who spoke to CNBC flagged growth and inflation challenges, with stagflation being a key concern. “If [the war goes on] longer, the impact on inflation is what would worry me most. If it lasts a couple of months more, if the Strait of Hormuz is blocked or half-blocked, then we’re going to have inflation that goes up more than 1%, maybe 1.5% this year,” said Pierre Gramegna, managing director of the European Stability Mechanism.

Greek Finance Minister Kyriakos Pierrakakis warned that the world is “potentially looking at the greatest energy crisis in history.” “And if you add up all the other elements, one third of fertilizers pass through the Strait [of Hormuz] — sulfur, helium, petrochemicals — collectively, it can potentially be a huge risk,” Pierrakakis told CNBC’s Tso.

Policymaking Challenges and Market Resilience

Policymakers who spoke to CNBC in Washington also said it had become difficult to forward plan due to the enduring uncertainty. “It’s absolutely impossible to predict what will happen, forecasts are very uncertain,” said Sweden’s Elisabeth Svantesson.

Verena Ross, chair of the EU regulator the European Securities and Markets Authority, said, “The markets have operated in quite an orderly way. Market players have been able to meet margin calls and things like that. So there has been quite some resilience in how the markets have operated. The question is, how will markets continue to cope with increased volatility that seems to be happening on a daily basis?”

Conclusion and Further Reading

Global equity markets have largely shrugged off the impact of the Iran war, with U.S. equities notching fresh records in Thursday’s session. The MSCI World Ex-U.S. index is still down roughly 1% since the war began, but has regained more than 8% over the past month.

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