Navigating an unpredictable future: global architecture, energy, security

We are at a moment when geopolitical tensions in the Gulf-particularly the ongoing conflict involving Iran-are once again intersecting with global energy markets, economic stability, and the trajectory of the energy transition. But beyond the immediate crisis, what we are witnessing reflects a deeper structural shift.

We are entering an era of fragmentation-of geopolitics, trade, and increasingly of energy systems.

This is no longer a temporary deviation; it is becoming a defining feature of the global landscape. Today's developments in the Gulf are a clear manifestation of that shift.

The global energy system is now both highly interconnected and structurally vulnerable. Around 20% of globally traded oil passes through the Strait of Hormuz, alongside a substantial share of LNG exports. This creates a critical chokepoint. Recent events show that even partial disruptions-on the order of 20 to 50 percent-can have disproportionate effects on prices, logistics, and economic activity.

At the peak of recent tensions, up to 10–12 million barrels per day of oil-roughly one-fifth of global trade-was at risk, alongside significant LNG flows. Refining and product supply chains were also affected, amplifying the shock across the system. This is not a localized disturbance; it is a global stress test.

Against this backdrop, I will frame my discussion around three scenarios, and within each, briefly assess implications not only for the GCC and MENA region, but also for Asia, Europe, Africa, and the United States.

Scenario 1: Ceasefire holds – agreement within weeks

In the first scenario, the ceasefire broadly holds, leading to an agreement within weeks.

Energy markets would stabilize, with prices easing as risk premiums decline and flows through Hormuz normalize.

The IMF estimates that a 10% increase in oil prices reduces global GDP growth by about 0.15 percentage points. A reversal of recent price spikes would therefore support global recovery.

Regional implications:

• Asia: As the largest importer of Gulf oil and LNG, Asia benefits the most. Countries such as China, India, Japan, and South Korea would see lower import costs and improved energy security, easing inflationary pressures.
• Europe: Having reduced dependence on Russian gas, Europe remains sensitive to LNG markets. Stabilization would relieve pressure on gas prices and storage strategies, supporting industrial recovery.
• Africa: Many African economies-particularly importers-would benefit from lower fuel costs and reduced fiscal strain, though export-oriented producers would see more limited gains.
• United States: As a net energy exporter, the U.S. is less directly exposed. Lower global prices may slightly reduce upstream revenues but would support domestic inflation control and consumer spending.

For the GCC, growth remains stable-likely 2.5–3.5% (IMF estimates)-with continued export revenues.