Navigating an unpredictable future: global architecture, energy, security

Such underlying analysis suggests that the broader economic impact could approach $1.5 trillion in trade and output effects.

The IMF and World Bank warn of stagflation risks:

• Global growth reduced by 0.5–1 percentage point,
• Inflation elevated,
• Financial volatility increased.

Regional implications:

• Asia: The most severely affected region. High dependence on Gulf energy means sharp increases in import bills, industrial slowdown, and macroeconomic stress. This could significantly dampen global growth.
• Europe: Faces renewed energy crisis dynamics, with high gas prices, industrial contraction risks, and increased fiscal burden from energy subsidies.
• Africa: Highly vulnerable. Many economies would face severe balance-of-payments pressures, inflation spikes, and social risks linked to energy and food costs.
• United States: More insulated in supply terms, but not immune: Benefits from high export prices, but faces inflationary pressure, tighter financial conditions, and global economic slowdown, which feeds back into U.S. growth.

For the GCC:

• Revenues may increase initially, but overall economic impact becomes more complex and potentially negative due to trade disruption, capital outflows, and infrastructure risk.

From a climate perspective:

• This scenario may accelerate long-term diversification, but in the short term, increases reliance on high-emission fuels, as security dominates policy priorities.

Conclusion

Across all three scenarios, one central conclusion emerges: we are no longer operating within a stable, globalized energy system-but within a fragmented, security-driven one.

This has several implications:

1. Energy security and energy transition are now inseparable-they must be addressed together.