Oil workers in Iran maintained operations across facilities, ensuring exports were not halted "even for a single day" during the ongoing conflict, including at key export hubs such as Kharg Island. This sustained labor allowed Iran's oil sales to remain "favorable," with the selling price of Iranian crude having "significantly increased," according to Iran's oil minister Mohsen Paknejad. Revenue from these sales is now allocated to repairing damage to industry caused by wartime attacks, even as the International Monetary Fund (IMF) warns that a worsening of the Iran war could push the global economy to the brink of recession, with global GDP growth potentially falling to 2.0%.
Who Profits from Conflict
The IMF's latest World Economic Outlook projects global GDP growth for 2026 at 3.1% in its most optimistic scenario, a 0.2 percentage point cut from its January forecast. This scenario assumes a short-lived war with Iran and oil prices averaging $82 per barrel for 2026. However, under an adverse scenario of a longer conflict, the IMF predicts global GDP growth would fall to 2.5% this year, with oil prices around $100 per barrel. In the most severe scenario, an extended and deepening conflict with much higher oil prices would slash global growth to 2.0%, a level seen only four times since 1980, including the 2009 financial crisis and the 2020 COVID-19 pandemic. IMF chief economist Pierre-Olivier Gourinchas stated that this would mean "a close call for a global recession."
Under this severe scenario, oil prices would average $110 per barrel in 2026 and $125 in 2027. Such sustained high prices directly translate into increased surplus extraction for oil-producing nations and corporations, while simultaneously driving up costs for the global working class. Gourinchas noted that prices at this level would increase expectations "that inflation is here to stay," prompting wider price increases and demands for wage hikes from workers struggling to maintain their living standards. The IMF itself acknowledged that without the Middle East conflict, it would have upgraded its growth outlook by 0.1 percentage point to 3.4% due to a continued technology investment boom, lower interest rates, less severe U.S. tariffs, and fiscal support in some countries, all factors that primarily benefit capital accumulation.
The State's Role in Crisis Management
The IMF, a key institution in managing global capital, warns that central banks may need to "step on the brakes" to bring inflation back down if expectations rise. Gourinchas stated this "may require more pain than in 2022," indicating that state-backed monetary policies would impose further austerity on the working class to protect the value of accumulated wealth. While central banks might "look through" a short-lived energy price surge, this is only if inflation expectations remain anchored, preventing widespread wage demands. Global inflation for 2026 would top 6% in the severe scenario, compared to 4.4% in the most optimistic reference scenario.
Across the globe, the economic fallout is unevenly distributed. Emerging market and developing economies, whose GDP is often more dependent on oil inputs, are projected to take a larger hit, with 2026 growth falling 0.3 percentage points to 3.9%. The Middle East and Central Asia region, at the conflict's epicenter, is forecast to see 2026 GDP growth fall by two full percentage points to 1.9%, experiencing widespread infrastructure damage and sharply curtailed energy and commodity exports. Specific GDP declines for 2026 are forecast at 6.1% in Iran, 8.6% in Qatar, 6.8% in Iraq, 0.6% in Kuwait, and 0.5% in Bahrain. Meanwhile, the U.S. growth outlook was only slightly shaved to 2.3% for this year, reflecting the positive effects of tax cuts, lagged interest rate cuts, and continued AI data center investment, which partly offset higher energy costs, demonstrating how state policies and technological capital continue to drive accumulation in advanced economies.
Labor Bears the Cost
The euro zone, still grappling with higher energy prices from Russia's 2022 invasion of Ukraine, now faces a further blow from the Middle East conflict, with its growth outlook falling 0.2 percentage points in both 2026 and 2027 to 1.1% and 1.2% respectively. This reflects the ongoing burden on European workers and consumers. Japan's growth remains weak at 0.7% for 2026 and 0.6% for 2027, with the Bank of Japan expected to hike rates at a slightly faster pace. China's growth for 2026 is forecast at 4.4%, with headwinds from a depressed housing sector, a declining labor force, lower returns on investment, and slower productivity growth expected to cut its 2027 growth to 4.0%. The IMF's analysis underscores how the current economic order, exacerbated by conflict, prioritizes the stability of capital markets and corporate profits, while the burden of inflation, economic contraction, and potential job losses falls disproportionately on the global working class, whose labor continues to fuel the system even in wartime.