Weekly Global Economic Update: March 24, 2026
Insights from Deloitte’s Chief Economist Ira Kalish
As global economic conditions continue to evolve amid geopolitical tensions and shifting market dynamics, Deloitte’s research team provides an overview of the key developments shaping the world economy this week. Notably, the ongoing conflict in the Middle East is casting a substantial shadow over energy markets and international trade, while China’s economy shows promising signs of rebound.
The Middle East Conflict and Its Economic Repercussions
Reports indicate that Saudi Arabian officials are closely monitoring oil price trajectories in light of the continued conflict in the Middle East. Their base-case forecast suggests that if hostilities persist through late April, Brent crude oil prices could surge to as high as $180 per barrel. While historically oil-exporting nations may welcome higher prices, Saudi Arabia’s stance is rooted in a preference for price stability. Dramatic price spikes risk suppressing global economic activity, which would ultimately dampen overall oil demand. The Saudis also draw lessons from the 1970s oil crisis, when prolonged high prices led to lasting shifts in energy consumption behaviors worldwide.
Increasingly, U.S.-based liquefied natural gas (LNG) producers are responding to supply shortfalls resulting from disruptions at the Strait of Hormuz by planning export boosts. Current market conditions allow U.S. producers to command favorable prices. However, significantly boosting LNG output to meet global demand would require substantial new investments and time. European economists recently expressed concerns regarding potential U.S. export restrictions to protect domestic prices, but no such measures are being considered currently. The Europeans are particularly reliant on American LNG amidst reduced gas flows from Qatar.
Airlines globally are also facing ripple effects from the energy disruption. Some carriers, especially European firms operating routes to Asia, fear jet fuel shortages that might constrain return flights due to the volatility of Middle Eastern oil supplies. These concerns come as jet fuel prices have doubled, exerting immediate pressure on profitability given many airlines’ limited fuel hedging practices. The Middle East, particularly Kuwait, accounts for 15% of the jet fuel passing through the Strait of Hormuz, with refining capacity shrinking in Europe but expanding in China. China’s recent halt on refined fuel exports exacerbates supply challenges, compelling fuel consumers to seek alternative sources. Prolonged conflict risks driving airline ticket prices upwards and suppressing travel demand.
Fatih Birol, head of the International Energy Agency (IEA), highlights that the crisis represents “the greatest global energy security threat in history.” He warns that even if hostilities cease soon, restoring damaged oil and gas infrastructure may take months or longer, with some sites needing at least six months to resume operation. Birol emphasizes that reopening the Strait of Hormuz for safe transit is critical to stabilizing oil prices. In the interim, he advocates for behavioral changes such as increased remote work, reduced air travel, and slower driving speeds to curb oil demand, reminiscent of the 1970s energy conservation efforts following price shocks.
Birol also points out that energy market disruptions extend beyond fuel prices, as hydrocarbon production underpins various critical commodities, including fertilizers. Shortages in oil and gas supply, therefore, have cascading effects on agricultural inputs and broader industrial output.
China’s Economic Recovery
Amid these geopolitical tensions, China’s economy is showing signs of a robust rebound. Although details were limited, Deloitte’s economists note that China’s recovery supports global demand stability, which could partially counterbalance the shocks from the Middle East conflict. The renewed economic activity in Asia’s largest economy remains a vital factor for sectors worldwide, particularly in manufacturing, consumer spending, and trade flows.
Central Banks and Financial Markets’ Response
Major central banks have been closely monitoring the evolving situation, adjusting policies as needed to manage inflationary pressures and economic risks. Bond investors are similarly responsive, recalibrating expectations based on developments in energy prices and geopolitical stability. Deloitte highlights the importance of these financial indicators as barometers for economic confidence amid uncertainty.
Looking Ahead
The coming weeks will be critical in determining the trajectory of oil prices, global supply chains, and economic growth. The conflict in the Middle East continues to pose significant risks, but coordinated international responses and adaptive market behaviors can mitigate some impacts. Deloitte’s team continues to track these changes, providing timely analysis to help businesses and policymakers navigate this complex environment.
Contact for More Information:
Ira Kalish
Chief Global Economist, Deloitte Services LP
Email: [email protected]
Phone: +1 310 420 0392
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This article is based on Deloitte’s Weekly Global Economic Update for the week of March 24, 2026.