LONDON — The framework agreement between the United States and Iran paves the way for an end to outbreaks of violence and severe disruption to energy supplies and trade in the Persian Gulf. But don’t expect economies around the world to simply return to where they were before the United States and Israel began bombing Iran on February 28.
The war triggered changes that will be difficult to reverse.
The global energy order is being redesigned
The near halt in oil and gas deliveries from the Middle East, coupled with the jump in prices, is causing a change in the balance of forces. Energy producers, from the Gulf to the Americas, are competing for space to maintain or expand their influence, while consumers try to reduce dependence and reinforce security of supply.
As a result, the energy market is changing, the energy matrix is changing and the protagonists in the sector are also changing.
The strong vulnerability of countries in Asia, Europe and other regions dependent on imported energy has accelerated the search for alternatives. In some places, such as South Korea and Japan, this has led to greater use of dirtier fuels such as coal.
In the longer term, however, this energy shock — the second in just four years — should accelerate the transition to renewable sources such as solar and wind, in addition to nuclear energy.
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Advances in electric battery technology and efficiency make this shift more viable than it was when Russia’s invasion of Ukraine triggered a global energy shock in 2022, says Daan Walter of Ember, a London-based energy research group.
In many places, for example, electric vehicles are increasingly accessible. And in April, wind and solar generated more electricity worldwide than gas for the first time.
“This represents a huge turning point,” Walter said. “What five years ago might have been barely competitive is now, clearly, cheaper.”
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According to him, investments in renewables also started to look like a better bet, with a potential return in around two years, rather than 30.
Relations between producers also change
The war raised tensions between the United Arab Emirates and Saudi Arabia and led the Emirates to leave OPEC+, an expanded oil cartel. The impact of this exit will only be fully felt when oil production in the region grows again. But a weakened OPEC could increase volatility in the oil market.
The rift also encouraged the Saudis to move closer to Russia. This month, President Vladimir Putin singled out Saudi Arabia as an “honored guest” at an economic forum in St. Petersburg.
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Russia, the world’s second-largest producer of crude oil and gas after the United States, was also strengthened in other ways by the war. The Trump administration temporarily lifted sanctions imposed on the country, allowing Moscow to increase profits from oil exports at a time when its economy is struggling.
Across the Atlantic, Brazil, Venezuela, Colombia, Argentina and Guyana are expanding their oil production capacity as the world seeks alternative suppliers.
China is one of the biggest beneficiaries
The effort to expand and diversify energy grids is likely to continue long after the war ends. And China appears as the main beneficiary of the expected advance in renewables.
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The country is far ahead of the rest of the world in the production of wind turbines, high voltage cables, transformers, solar panels, batteries, energy flow management software and other equipment.
China’s growing role in ensuring that other countries have reliable energy supplies increases its strategic influence and global relevance.
“China appears to be a clear winner,” concluded analysts at global energy consultancy Wood Mackenzie.
Rebuilding trust will be difficult
It is unclear whether maritime traffic will ever again flow freely through the Strait of Hormuz — the only sea route to move oil, natural gas and other cargo out of the Persian Gulf.
Iran has been pushing to impose tariffs on ships passing through the strait, although such a plan could violate international agreements. Even if new charges are not formalized, Iran has already demonstrated that it can interrupt trade whenever it wants, which increases risks and costs.
“I don’t think the Strait will ever return to the level of free passage certainty that we were used to,” said Maurice Obstfeld, former chief economist at the International Monetary Fund.
Likewise, confidence in the peace, stability and growing prosperity of the region has also been shaken.
“The dynamism of the Gulf economies could be undermined by the vulnerability they have demonstrated,” Obstfeld said, which “increases Iran’s bargaining power in the region.”
The economy entered a trajectory of weaker growth and higher inflation
When economists at the World Bank began analyzing the data at the beginning of the year, they were pleasantly surprised.
“We were starting to think about revising our projections upward in January and February because things were looking very good,” said Indermit Gill, the bank’s chief economist. “Inflation was falling, growth was accelerating, trade had taken a hit, but it was still standing.”
That has changed.
The bank revised its economic outlook and reduced the projection. It now expects global growth to decline to 2.5% this year, down from 2.9% in 2025.
Inflation is also starting to gain strength. In the United States, it rose for the third month in a row, reaching an annual rate of 4.2% in May. And instead of bracing for the next rate cut, Wall Street is now hoping the Federal Reserve will raise rates at least once this year. Last week, the European Central Bank raised the rate to 2.25%. “The war in the Middle East is generating inflationary pressures,” said the institution.
Higher interest rates have lasting and serious effects for both rich and poor countries, which already accumulate high public debts and allocate increasingly larger shares of revenue just to pay financial charges.
These budgetary pressures tend to increase even further as governments expand aid to families affected by rising energy prices and increase military spending to respond to worsening security threats.
Asian economies, the hardest hit by the crisis, have already turned heavily to the Asian Development Bank in search of emergency loans to try to protect their economies and finances from the effects of the war with Iran.
“The global economy is going to end up getting more nervous,” Gill said. And that’s not good for long-term planning, investing, or growth.
c.2026 The New York Times Company
