The Strait of Hormuz blockage is the defining economic shock of 2026, disrupting a critical energy corridor and driving oil prices sharply higher. Alongside higher tariffs, rising energy costs have weakened global growth by squeezing household purchasing power and corporate margins. Energy importers face the largest impact; exporters and economies with diversified supply, resilient domestic demand or effective subsidies are better placed to absorb it.
Delivery
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Key Findings
Hormuz disruption keeps energy prices elevated
The Strait of Hormuz blockage severed the corridor carrying around a third of global oil exports, lifting the commodity fuel (energy) index roughly 19% year on year in June 2026. Rerouting, higher Atlantic Basin supply and a coordinated IEA stock release limited the damage: the 2026 global annual real GDP growth forecast was cut to 2.9% in April, then slightly revised back to 3.0% in July.
Tariffs reset onto a more durable, higher footing
The temporary 10% baseline tariff expired on 24 July and was replaced by duties of 10-12.5% covering some 60 partners and virtually all US imports. Sector tariffs remain, with extra measures on Brazil and Canada, and annual reviews are possible for USMCA now. Higher US market access costs are structural rather than temporary.
Energy mix and domestic demand decide who absorbs it
Global inflation is forecast at 4.9% for 2026, keeping central banks cautious. Import-dependent, export-led economies such as the Eurozone, Japan and the UK face the steepest pressure, while the US, Brazil and India are cushioned by domestic demand, energy self-sufficiency or subsidies.
AI investment is the main counterweight to the shock
Capital spending on AI infrastructure and data centres is the clearest source of momentum, supporting investment in the US, lifting semiconductor output in Japan and drawing capital into ASEAN.
A Hormuz disruption ripples across demand, food, and energy costs
Key findings
Our expert’s view of the global economy in Q3 2026
Top five trends in global economy
Key events shaping economic growth over April 2025-July 2026
Hormuz disruption impact on business
Global growth cools under higher energy costs, but resilience holds
Persistent energy costs reignite inflation, hitting emerging markets hardest
Energy markets adapt to the Hormuz shock, but alternative routes stay fragile
Severe Escalation and Lasting Trade Disorder to pull GDP below baseline
Inflation uncertainty adds to the cost pressure on energy-exposed businesses
New Trump tariffs make US market access structurally more expensive
Tariff scenarios pull growth and inflation sharply apart by 2027
US: slowing but resilient growth amid trade and commodity price uncertainty
US: Energy and housing keep inflation above target despite tariff relief
US: Structural resilience buffers the economy against oil price shocks
Eurozone: Energy shock stalls fragile recovery
Eurozone: imported energy costs reignite price pressures
Eurozone: Total energy dependence amplifies all downside scenarios
UK: Weak consumer confidence and emerging trade opportunities
UK inflation withstands energy costs pressure
UK balancing between domestic and international challenges
Japan: Economy slows as energy shocks and trade pressures test resilience
Japan’s inflation outlook reflects deep energy vulnerability and rising risks
Japan severely impacted under rapid and prolonged Iran war
China’s export and AI engines mask uneven domestic recovery dynamics
Three downside scenarios highlight risks across China economy
India balancing between domestic benefits and international obstacles
India balancing between unpredictable weather and energy supply
India: Energy vulnerability continues to weigh on the economy
ASEAN growth holds firm despite tariffs and energy pressures
Energy dependence keeps ASEAN inflation pressures elevated throughout 2026
ASEAN faces divergent risks from China growth, trade war and energy disruption
Brazil: Strong labour market supports growth despite US trade pressures
Brazil: Sticky inflation persists as trade escalation drives upside risk
Brazil: Latin America downturn poses the sharpest growth threat
Mexico: Nearshoring momentum stalls as tariff uncertainty weighs
Mexico: Fuel subsidies limit Hormuz oil shock pass-through but food inflation persists
Mexico: USMCA review and mixed energy exposure create binary outcomes
Questions we are asking
Opportunities for growth
Real GDP annual growth forecasts and revisions from last quarter
Inflation forecasts
Central bank interest rates forecasts
Baseline and alternative scenarios: Q3 2026
Alternative scenarios (cont.): Q3 2026
Global Economic Forecasts: A structured view of the macro outlook and key risks
Data types used in Global Economic Forecasts
AI usage in Euromonitor reports
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