A new Global Trade Alert (GTA) model warns that continued Middle East fighting could shave 1.75% off worldwide merchandise trade by the end of 2025, far below pre‑war forecasts. The analysis draws on past shocks such as Covid‑19 and the 2008 commodity crash, concluding that persistent oil‑price swings erode trade resilience more than steady high prices.

Shipping rates on key Asia‑Europe and Asia‑North America lanes have barely moved since the conflict began, reflecting weak demand. Yet GTA estimates that a 25% rise in fuel‑price volatility – comparable to the post‑Ukraine‑invasion energy crisis – would delay the WTO’s projected 1.9% trade growth for 2026, with the worst‑case scenario cutting growth by half a percentage point. The model finds volatility, not price level, the primary drag on trade.

Brent crude has oscillated from roughly $70 to a peak of $120 per barrel, then back to $86 before climbing above $126 as talks over the Strait of Hormuz stalled. Regions dependent on oil transit, notably Africa and the Middle East, could see trade declines exceeding 8 percentage points, while China, the Eurozone and the US face modest drags. Current volatility sits 60% above pre‑war norms, implying a 1.1‑point dip in trade growth by 2027 if the trend persists.