Responding to the Global Shock from the War in the Middle East Erhan Artuc, Quy-Toan Do, Emanuela Galasso, Devaki Ghose, Christoph Lakner, Aaditya Mattoo, Bob Rijkers, Sandra Rozo, Dario Tortarolo, and Nishant Yonzan1

https://documents1.worldbank.org/curated/en/099137106232625656/pdf/IDU-204de921-282f-4016-a1e5-2bb9d9d9f4ad.pdf Since the latest Middle East war erupted on February 28, 2026, ship transits through the Strait of Hormuz have fallen by roughly 95%. With energy prices at historic highs and trade through the Strait nearly at a standstill, the consequences have rapidly become global. Countries are contending with sharply rising costs—not only for energy but also for a range of essential commodities such as fertilizers, aluminum, and petrochemicals. For developing countries, the risk is acute: an economic crisis that destabilizes fragile economies and undoes years of hard-won development progress.