Washington (EFE)— The International Monetary Fund said Thursday that rising crude oil prices driven by the war with Iran are feeding through to inflation worldwide, while noting that the bulk of the price surge occurred in March — when the conflict erupted — and that costs have remained relatively stable since.
IMF spokesperson Julie Kozack, speaking at a press briefing, said the Fund sees “signs that the impact of the crisis is passing through to inflation” and that near-term inflation expectations “have experienced an uptick.”
The U.S. launched its military campaign against Iran on February 28. Beyond the immediate price shock, Kozack said the conflict is producing broader financial ripple effects: stock market gains are becoming more concentrated, investors are revising forecasts and now pricing in interest rate increases, and sovereign debt markets are seeing a rise in bond yields.
Crude oil prices have climbed 35% since March, but Kozack noted that relative to the macroeconomic baseline the IMF formulated shortly after the conflict began, oil has risen only about 3% — a modest move she attributed to ongoing contacts between Washington and Tehran aimed at ending the fighting.
“We have witnessed considerable volatility in crude oil prices, with initial movements up and down over time, and even periods of stability,” Kozack said. “What we can say is that most of the increase in oil prices occurred in early March, when crude shipments through the Strait of Hormuz were disrupted.”
She added that crude markets are pricing in a positive expectation for a reopening of Hormuz, pointing out that spot prices for immediate delivery are higher than futures contract prices — a market structure consistent with expectations of near-term supply relief.
Reserves Falling Toward Five-Year Low
Global oil inventories — both strategic and commercial — stood at more than 8 billion barrels before the war broke out, a five-year high. Those reserves have been steadily drawn down since, and the IMF projects that by July they will reach a five-year low of approximately 7.5 billion barrels.
The pressure is spreading beyond crude. “We are also observing that oil prices are generating a domino effect on petroleum-derived products,” Kozack said. “Reserves of these products — such as jet fuel, refined products, and petrochemicals — are also reaching minimum levels.”
Aviation fuel prices in Europe and Asia have risen 35% compared to pre-war levels. Global gasoline prices are up roughly 40%.
