Market Update: Extended Mideast Conflict Would Slow Trade and Growth, W.T.O. Warns – Full Analysis

The World Trade Organization said on Thursday that the ongoing conflict in the Middle East could slow global trade and economic growth more than expected, as high energy prices weigh on economic activity, and travel and transport disruptions put pressure on trade and food supplies.

The group said it was forecasting trade in goods to grow by just 1.9 percent in 2026, down sharply from 4.6 percent growth in 2025. The group had anticipated a sharp drop-off in trade growth as the effects of President Trump’s tariffs settled in and purchases of expensive artificial intelligence chips slowed.

But the organization warned that trade growth could fall by another 0.5 percentage points this year, if prices of both crude oil and liquefied natural gas remained elevated as a result of the Middle East conflict.

If the conflict ends quickly and A.I. spending remains strong, however, trade prospects could improve, the W.T.O. said.

Ngozi Okonjo-Iweala, the director general of the W.T.O., said in a statement that global trade had remained resilient, in part because of the strength of trade related to A.I., and the lack of retaliation from other countries to Mr. Trump’s tariffs. But she said that an extended conflict in the Middle East would put trade at risk.

“Sustained increases in energy prices could increase risks for global trade, with potential spillovers for food security and cost pressures on consumers and businesses,” she said.