The heads of the International Energy Agency (IEA), International Monetary Fund (IMF) and the World Bank, yesterday, announced that they will form a coordination group to maximize their response to the significant economic and energy impacts of the war in the Middle East.
In a joint statement, the three global bodies noted that the war had caused major disruptions in the region, resulting in one of the largest supply shortages in global energy market history. “At these times of high uncertainty, it is paramount that our institutions join forces to monitor developments, align analysis, and coordinate support to policymakers to navigate this crisis,” the heads of the IMF, IEA and World Bank said.
According to the statement, the new coordination group will assess the severity of impacts across countries, coordinate a response mechanism, and mobilize stakeholders to deliver support to countries in need, the international bodies said.
The response mechanism could include targeted policy advice, assessment of potential financing needs and related provision of financial support, including through low or zeropercent financing, as well as unspecified risk mitigation tools, they said.
Thousands of people have been killed across the Middle East in the war, which began when the US and Israel struck Iran on February 28, triggering Iranian attacks on Israel, US bases and the Gulf states, while opening a new front in Lebanon. Now in its second month, the conflict has spread across the region, disrupting energy supplies and threatening to send the global economy into a tailspin.
“The impact is substantial, global, and highly asymmetric, disproportionately affecting energy importers, in particular low-income countries,” the IMF, IEA and World Bank said.
They noted that the war was already resulting in higher oil, gas and fertilizer prices, while triggering concerns about food prices and affecting global supply chains of helium, phosphate, aluminum, and other commodities. Tourism had also been hit.
