Weekly Global Economic Update: March 24, 2026
Insights from Deloitte’s Team of Economists on Global Economic Developments
Deloitte’s chief global economist, Ira Kalish, provides a detailed analysis of recent economic trends and major geopolitical influences impacting markets worldwide. This week’s update focuses heavily on the ongoing conflict in the Middle East and its far-reaching effects on energy markets, global trade, and economic activity.
The Middle East Conflict and Its Economic Ramifications
The conflict intensifying in the Middle East continues to generate significant uncertainty in global energy markets. Saudi Arabian officials are closely monitoring potential outcomes related to oil prices, with a base-case forecast suggesting that Brent crude could surge to as high as $180 per barrel if tensions persist into late April. While one might assume that an oil-exporting nation would welcome higher prices, Saudi Arabia traditionally favors price stability.
The Saudi government’s primary concern lies in the potential adverse impact of sharply rising oil prices on global economic activity. Historical analogies to the 1970s energy crisis spotlight ongoing fears: during that decade’s oil shocks, consumers and businesses adjusted by permanently shifting away from oil dependency, thereby curbing demand. Saudi Arabia hopes to avoid such a scenario where runaway prices lead to demand destruction, undermining the long-term viability of the oil market.
Energy Sector Adjustments and Supply Concerns
In response to supply disruptions, particularly those impacting the critical Strait of Hormuz, U.S.-based liquefied natural gas (LNG) producers plan to increase exports to take advantage of favorable pricing conditions. Some U.S. LNG facilities currently have unused capacity; however, substantially boosting output would require new investments that would only become operational after several years.
European stakeholders have expressed concern over potential U.S. export restrictions on LNG, fearing reduced access amid Qatar’s supply shortages. Deloitte reports no indication that the U.S. government is contemplating such controls, but the issue remains a notable point of tension given Europe’s pressing need to secure alternative energy sources.
Meanwhile, global airlines are grappling with increasing jet fuel prices—some have seen prices double—fueled in part by disruptions in Middle Eastern oil supplies. European airlines operating routes to Asia have been able to secure fuel for outbound journeys, but there are rising anxieties about sourcing fuel for return flights. The volatility in fuel availability and pricing is pushing airlines to consider reducing flights in the coming weeks, underscoring the immediate economic stresses faced by the industry.
Shifts in Jet Fuel Production and Global Energy Security
Jet-fuel refining capacity has seen a geographical shift in recent years. European refining capacity has decreased, while China’s has increased. However, China has simultaneously placed an embargo on exports of refined fuels, further exacerbating supply challenges for fuel consumers elsewhere.
Fatih Birol, Executive Director of the International Energy Agency (IEA), has characterized the current situation as the “greatest global energy security threat in history.” He notes that restarting oil and gas production in conflict-affected regions could take six months or longer, as many fields have been shut down or damaged. Though some nations are raising output and Saudi Arabia is rerouting shipments through the Red Sea, Birol emphasizes that easing the crisis hinges on reopening transit through the Strait of Hormuz, a critical chokepoint in global energy supply chains.
Strategic Responses: Demand Reduction and Energy Transition
To mitigate the risk of prolonged elevated oil prices, the IEA urges governments and consumers to adapt behaviors by reducing energy consumption. Recommended measures include encouraging remote work, minimizing air travel, and reducing driving speeds. These steps echo the behavioral shifts triggered during the 1970s energy crisis, which precipitated advances in fuel efficiency, reduced oil reliance, and the development of nuclear energy infrastructure—which today accounts for 40% of the global nuclear power capacity, according to Birol.
The current crisis also underscores the interconnected nature of energy markets with other commodities. Many crucial materials used in fertilizers and other products derive from hydrocarbon processing. Disruptions in oil and gas supply chains will likely ripple through multiple sectors, impacting broader industrial production beyond direct energy consumption.
Looking Ahead
Deloitte’s economic outlook advises vigilant monitoring of geopolitical developments and energy market responses, as these will remain pivotal drivers of global economic stability in the near term. Firms and policymakers must remain adaptable, balancing short-term shocks with strategic investments in energy security and diversified supplies.
For continued updates and more in-depth economic analysis, Deloitte Insights remains a vital resource for navigating the complexities of today’s global economy.
About Deloitte Insights
Deloitte Insights and its research centers deliver proprietary research designed to help organizations translate aspirations into action across diverse industries and economic domains. With regular updates on global economics, workforce trends, technology, and more, Deloitte provides timely, actionable insights for decision-makers worldwide.
For more information, visit Deloitte Insights.