Shafaq News- Washington

War-linked supply shock has cut global oil flows by about 13% and LNG by 20%, pushing energy prices higher and forcing a downgrade in global growth forecasts, the International Monetary Fund (IMF) warned on Thursday.

In a speech during the 2026 IMF Spring Meetings, IMF Managing Director Kristalina Georgieva said oil prices rose from $72 per barrel before the conflict to a peak of $120, before easing slightly. She pointed to multiple ripple effects, including shortages of refined fuels such as diesel and jet fuel, disruptions to transport and trade, and worsening food insecurity, with an additional 45 million people at risk of hunger due to higher transport and fertilizer costs.

She outlined three main transmission channels for the shock: higher prices and shortages driving inflation, rising inflation expectations that could destabilize markets, and tightening financial conditions marked by widening bond spreads and a stronger US dollar.

Georgieva also warned that global public debt remains elevated, limiting fiscal space, and stressed the need for responsible policy management as borrowing costs rise.

She estimated that demand for IMF financial support could increase by $20 billion to $50 billion in the near term, depending on how the conflict evolves, adding that it stands ready to assist its 191 member countries.

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