The World Trade Organization (WTO) stated on Thursday that if energy price increases and shipping disruptions caused by the Middle East conflict persist, the slowdown in global trade flows and economic growth is expected to be more rapid than previously forecast. However, a surge in artificial intelligence (AI)-related investments could help mitigate the impact.
Attacks by the United States and Israel on Iran at the end of February, followed by retaliatory actions from Iran, have already disrupted energy production and transportation in the Strait of Hormuz. There are few signs of the conflict ending: on Wednesday, Israel struck Iran's South Pars gas field, while Iran retaliated by targeting a major gas hub in Qatar.
The WTO indicated that if these disruptions continue and prices for crude oil and liquefied natural gas remain elevated throughout 2026, goods trade flows would grow by only 1.4% this year, lower than the pre-attack forecast of 1.9%.
Ngozi Okonjo-Iweala, Director-General of the WTO, said, "Sustained high energy prices could amplify global trade risks and potentially have spillover effects on food security, increasing cost pressures on consumers and businesses."
Prior to the outbreak of the conflict, the WTO had projected global economic growth of 2.8% for this year, a slight slowdown from 2025. If the conflict continues until the end of the year, the organization expects growth to slow to 2.5%.
The hardest hit would be energy-importing economies in Europe and Asia, as well as the Middle East region itself. In contrast, energy-exporting economies such as the United States might experience stronger-than-expected growth.
The WTO estimated that global merchandise trade grew by 4.6% in 2025, a significant improvement over the previous year, despite a series of tariff increases implemented by U.S. President Trump. The strength in trade flows was largely attributed to a boom in AI-related investments, concentrated in the United States.
According to WTO data, AI-related products accounted for only one-sixth of global trade in 2025 but contributed 42% of its growth. The WTO noted that while President Trump's tariffs did reduce U.S. imports of many other goods, most AI-related products such as chips, semiconductors, and data transmission equipment were largely unaffected by the new tariffs.
Robert Staiger, Chief Economist at the WTO, stated, "The growth in world trade volumes has been surprisingly strong. However, the drivers behind this unusually robust growth are unlikely to be sustained."
Although the WTO expects demand for AI-related products to moderate, it acknowledged that 2026 could still bring new surprises. If the investment boom continues, trade growth this year could see an additional increase of 0.5 percentage points.
The WTO stated, "Upside and downside risks could materialize simultaneously, with energy prices remaining high while trade in AI-related products continues to surge. In such a scenario, trade growth could align with earlier projections."
If the conflict is not resolved soon, it is also expected to significantly hinder global services trade, including sectors like transport and tourism. In recent years, services trade has been growing faster than goods trade.
Before the conflict erupted, the WTO projected services trade growth of 4.8% for this year, down from 5.3% in 2025. If the conflict persists, the organization expects growth to slow to 4.1%.
In 2025, the Middle East accounted for 8.4% of international tourist expenditure and 7.4% of global services trade.
The WTO added, "Geopolitical uncertainty may dampen confidence, affect risk perceptions, and suppress non-essential travel demand. Over time, this could lead to shifts in international travel and trade patterns toward alternative routes and destinations perceived as lower risk."