Weekly Global Economic Update: Key Insights from Deloitte’s Economist Team
Week of March 24, 2026
Deloitte Insights, through its team of global economists, provides an in-depth look at the latest economic developments shaping markets and policies worldwide. This week’s update highlights significant economic trends, focusing on the ongoing conflict in the Middle East, the responses from major central banks and investors, and China’s recent economic rebound.
Ongoing Middle East Conflict and Its Economic Implications
The conflict in the Middle East continues to reverberate through global markets, particularly affecting energy prices and supply chains. Saudi Arabian officials are closely monitoring oil prices and have established a base-case scenario whereby, if the conflict extends into late April, Brent crude oil prices could surge to approximately US$180 per barrel.
Despite the potential benefits of higher oil prices for an oil-exporting country, Saudi Arabia favors price stability. Their concern stems from the risk that a sharp spike in prices could dampen global economic activity and, in turn, reduce oil demand. This recalls the energy crisis of the 1970s, when prolonged high oil prices triggered permanent changes in energy consumption patterns among households and businesses, thereby decreasing oil demand significantly.
Impact on Energy Markets and Responses
US producers of liquefied natural gas (LNG) are gearing up to increase exports to address global supply shortages caused by disruptions at the Strait of Hormuz. Some US producers reportedly possess surplus capacity, though scaling output substantially requires long-term investments. Conversations in Europe reveal concerns about the availability of American LNG amid a shortage of supplies from Qatar. There are currently no indications that the US government intends to implement export restrictions to safeguard domestic prices.
Airlines, particularly those operating European-Asian routes, are facing challenges due to potential jet fuel shortages and soaring prices, which have recently doubled. Middle Eastern refiners play a crucial role, with countries like Kuwait accounting for a significant share of seaborne jet fuel that passes through the Strait of Hormuz. However, declining refining capacity in Europe and export restrictions in China have intensified supply worries, prompting some airlines to consider cutting flight frequencies in the near term. These developments could push airline fares higher and dampen travel demand if the conflict persists.
International Energy Agency’s Perspective
Fatih Birol, head of the International Energy Agency (IEA), describes the current crisis as the “greatest global energy security threat in history.” Birol emphasized that several oil and gas sites shut down or damaged during the conflict will require months or longer to return to operation. Although some production increases and alternative oil routes, such as Saudi Arabia’s diversion to the Red Sea, have provided relief, the resumption of transit through the Strait of Hormuz remains critical to stabilizing prices.
Given the risk of sustained high energy prices, Birol echoed historical lessons, urging governments and consumers to adapt behaviors to reduce oil demand. Measures suggested include encouraging remote work, minimizing air travel, and lowering driving speeds. The IEA draws parallels to the 1970s energy crisis when similar behavioral adjustments helped reduce reliance on oil and spurred investment in energy alternatives, notably nuclear power.
Moreover, Birol highlighted that the energy disruption extends beyond fuel itself, affecting related commodities necessary for fertilizers and other products due to their hydrocarbon origins, which could have broader implications for global supply chains.
Additional Economic Highlights
Aside from these energy-related concerns, Deloitte’s economists note a positive trend as China’s economy shows signs of robust recovery after previous slowdowns, signaling potential booster effects for global trade and investment.
Central banks around the world remain vigilant and responsive to these unfolding challenges, factoring in geopolitical risks and inflationary pressures in their monetary policy decisions. Bond markets have also reacted to heightened uncertainties, reflecting shifts in investor sentiment amid the conflict and energy market volatility.
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Deloitte Insights, supported by multiple research centers, delivers proprietary research and expert analysis to help organizations navigate complex economic and industry landscapes. Covering diverse topics from human capital and technology trends to environmental, social, and governance factors, Deloitte Insights equips leaders with timely, data-driven findings necessary for informed decision-making.
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Contact Information:
Ira Kalish
Chief Global Economist | Managing Director, Research & Insights | Deloitte Services LP
Email: [email protected]
Phone: +1 310 420 0392
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