IMF says it will take time for energy, commodity prices to normalize after US-Iran deal

The International Monetary Fund said on Thursday it has seen energy and commodity prices fall since the U.S.-Iran agreement to halt hostilities and reopen the Strait of Hormuz, but it will take time for prices and Gulf trade flows to normalize.

IMF spokesperson Julie Kozack ‌told a news ⁠briefing that ⁠in the next update of its World Economic Outlook on July 8, the Fund will decide whether to continue with the three growth scenarios it presented in April that depended on Iran war outcomes.

As the Strait of Hormuz remained closed in May, keeping benchmark oil prices above $100 per barrel, Kozack had said the global economy was moving from the more benign "reference forecast," which had assumed a quick end to the conflict, to an "adverse ⁠scenario" with ‌2.5% global growth for 2026.


The adverse scenario assumed a full-year 2026 average oil price of $100 per barrel, but also a tightening of financial conditions and ⁠rising inflation expectations.

Kozack said on Thursday that inflationary expectations have been well anchored, as some central banks have moved to raise interest rates, and financial conditions have remained accommodative, with both advanced and emerging market countries able to access international financing markets.

Benchmark Brent crude oil futures for August delivery traded around $73 a barrel on Thursday, their lowest level since before the February 28 start of the U.S.-backed war with Iran.

Kozack also said prices for urea, other fertilizers and base metals ‌had fallen with the resumption of shipments from Gulf countries, but it will take time for full normalization of prices and trade because of shipping lead times to final destinations.

"So this ⁠means that there will be some time before we ... go back to a normal state, and of course that all assumes that the ceasefire remains in place," Kozack said.

She said the IMF is most concerned about the conflict's impact on developing countries that are net energy importers with few fiscal reserves or stockpiles of oil and other commodities, especially in Africa. Asked about the war's impact on India, Kozack said India's domestic demand remained strong, with real GDP growth projected at 6.5% for the 2026-2027 fiscal year.