Middle East conflict sparks surge in oil prices, IMF warns of rising global inflation
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The Managing Director of the International Monetary Fund, Kristalina Georgieva, warned on Monday about the inflation risks arising from the conflict in the Middle East, stating that every 10% increase in oil prices, if sustained for most of the year, would lead to a 40‑basis‑point rise in global inflation.
Speaking at a seminar hosted by Japan's Ministry of Finance, she said, "We are witnessing a new test of the economy's resilience against the new conflict in the Middle East."
She added, "My advice to policymakers in this new global climate is to think about the unthinkable and prepare for it."
On Monday, U.S. crude oil futures rose more than 20% in early trading, reaching their highest level since July 2022 as the expanding U.S.–Israeli war with Iran triggered fears of a potential supply crunch and prolonged disruptions to shipments through the Strait of Hormuz.
Around 02:30 GMT, the price of West Texas Intermediate crude rose 30.04% to $118.21 per barrel, while North Sea Brent crude climbed 27.54% to $118.22 per barrel.
The benchmark crude rose 12% on Friday and recorded a weekly increase of 36%.