Heads of the International Energy Agency (IEA), International Monetary Fund (IMF) and World Bank Group have agreed to form a coordination group to strengthen their response to the global energy and economic disruptions caused by the ongoing war in the Middle East.

In a joint statement issued yesterday, the institutions noted that the conflict had led to one of the largest supply shortages in the history of global energy markets, with far-reaching and uneven consequences across countries.

They also noted that the crisis had severely disrupted lives and livelihoods in the region, while its effects had spread globally, hitting energy-importing countries, particularly low-income nations, the hardest.

According to the statement, the impact is already being felt through rising oil, gas and fertiliser prices, alongside growing concerns over food costs.

The institutions also highlighted disruptions to global supply chains, including key commodities such as helium, phosphate and aluminium, as well as setbacks in the tourism sector due to flight disruptions at major Gulf hubs.

They warned that the resulting market volatility, weakening currencies in emerging economies and rising inflation concerns could lead to tighter monetary policies and slower economic growth.

The organisations stressed that coordinated action was especially critical for countries most exposed to the conflict’s ripple effects, particularly those with limited policy flexibility and high debt levels.

As part of the agreement, the new coordination group will assess the severity of the crisis across countries and regions by using shared data on energy markets and prices, trade flows, fiscal pressures, inflation trends, export restrictions, and supply chain disruptions.

It will also coordinate response measures, including targeted policy advice, evaluation of financing needs, provision of financial support such as concessional funding, and the use of risk mitigation tools where necessary.

In addition, the group will work to mobilise other multilateral, regional and bilateral partners to ensure timely and effective support for countries in need, while drawing on the expertise of other international organisations when required.

MEANWHILE, an economist, Samuel Caulcrick, has raised concerns about a looming global recession amid the growing impact of the Middle East crisis on economies.

Speaking with journalists in Lagos yesterday, Caulcrick warned that while concerns about a crisis rivalling the Great Depression of 1929 were gaining traction, the more immediate risk was a sharp global recession driven by energy shocks and increasing uncertainty.

He regretted that tensions in the Middle East, particularly involving Iran and its allies, had disrupted critical energy supply routes, pushing global oil prices above $100 per barrel, with Brent crude trading between $115 and $120 at peak levels.

He noted that the disruption of the Strait of Hormuz – a key artery for global oil shipments – had further tightened supply, triggering ripple effects across energy-dependent economies.

According to Caulcrick, the surge in oil prices is already increasing global inflation, with projections suggesting an increase of more than one per cent in yearly inflation rates worldwide.

He said financial markets were becoming increasingly sensitive to real-time information flows, particularly from political leaders, adding that platforms such as Truth Social were exacerbating volatility as investors reacted to policy signals, military developments, and diplomatic rhetoric.

Caulcrick said the coming months would be critical in determining whether the current turbulence evolves into a full-blown recession.