Trump, Iran have one month to reopen the Strait of Hormuz or risk major economic slowdown, OECD warns
President Trump and Iran have one month to reopen the Strait of Hormuz and get oil flowing again if they want to avoid a worldwide economic slowdown for the next two years, according to projections released Wednesday by the Organization for Economic Cooperation and Development (OECD).Already, global economic growth is expected to be significantly lower this year than it was last year — and it could plunge by more than a third if the a key oil chokepoint remains shut, according to the group, which aims to promote freedom, economic growth and social wellbeing in member countries, including the US.“The global economy entered 2026 with robust momentum, but the outlook has weakened significantly since the start of the conflict in the Middle East, with effects likely to be felt for some time,” OECD Secretary-General Mathias Cormann said in a statement.“The longer the disruptions last, the larger the economic and social costs become,” he added.
Under the OECD’s predictions, global economic growth would sink to 2.1% this year, down from 3.4 % in 2025 if the strait is not opened for good.Global economic growth would then plummet to 1.8% in 2027, likely pushing many nations into or close to a recession.
The hardest hit nations would be in Asia, which are the most dependent on crude oil and natural gas from the Persian Gulf, whose supplies have been closed off by Iran, the OECD warned.If the war ends in June and fuel disruptions are quickly addressed and the flow of oil and gas return to their pre-war levels, then the global economy has a chance to rebound and grow by 3.1% next year, the organization added.The OECD’s prediction comes as negotiations between the US and Iran remain heated over the terms of how to end the war, with attacks continuing in the Persian Gulf this week despite a cease-fire.
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