Iran War

From energy price spikes to shipping restrictions and supply chain disruptions, the onset of war in the Middle East has resulted in almost-immediate rippling effects around the world. Low- and middle-income countries, already exposed to shocks, face energy emergencies, food insecurity, fertilizer shortages, health risks, declining remittances, and more.

CGD experts are analyzing developments and assessing options policymakers have to mitigate impacts on vulnerable countries.

More from the Series

Blog Post

The Iran War Oil Shock Will Hit the Hungry Hardest—Cash Should Be Part of the Response
Lee Crawfurd
and
Eeshani Kandpal
April 02, 2026
The US–Israel war on Iran has already led to a spike in oil prices. While wealthier countries focus on fuel prices, for those in low- and middle-income countries (LMICs), this could mean something far worse: a sudden increase in hunger and poverty, as rising food prices erode purchasing power. We ar...
Crops on van in sudan
Blog Post

Beyond Oil: The Budgetary Costs of Conflict in the Middle East
Benedict Clements
and
Sanjeev Gupta
March 30, 2026
In a recent blog post, we argued that the increase in oil prices spurred by the war in the Middle East—particularly if sustained—will likely have major consequences for government budgets. Many governments, in both advanced and developing economies, are cushioning households and firms from higher en...
Cityscape sunset panorama of Tehran city
Blog Post

Will the Iran War Be the Breaking Point for Vulnerable Countries?
Mary Svenstrup et al.
March 20, 2026
Energy prices have spiked with the near-closure of the Strait of Hormuz and ongoing strikes on regional energy infrastructure. Even before this shock, many developing countries were increasingly vulnerable, pressured by high debt burdens, an unpredictable global trade environment, and unfavorable ex...
Contrast between poverty and wealth in Mumbai, India
Blog Post

Oil at $100 a Barrel: Fiscal Strain and Risks of Social Unrest
Benedict Clements
and
Sanjeev Gupta
March 17, 2026
Shielding households from the recent surge in oil prices could impose high fiscal costs on governments—about 0.9 percent of GDP in emerging and developing economies and 0.4 percent of GDP in advanced economies. Some highly vulnerable countries could face costs up to 3 percent of GDP.
Offshore oil and gas platform