IMF warns emergency oil stocks are nearly gone as US-Iran war pushes global economy to its limits

The IMF has cautioned that the global economy "could soon test the limits of resilience" as strategic energy reserves run critically low following months of US-Iran war disruption. The fund raised its 2026 global growth forecast by 0.1 percentage points to 3.1%, but warned the outlook is increasingly "split" between AI-powered advanced economies and energy-battered poorer nations. Chief economist Silvana Tenreyro told reporters in Bangkok that "resilience is under strain, with risks tilted to the downside." Petroleum prices remain up to 95% above pre-war levels, with Houthi strikes hitting Saudi oil facilities as recently as Monday night.

The IMF upgraded the UK's 2026 growth forecast but warned households face a price squeeze ahead of the Budget.

Top economies are heading for their biggest budget deficits since Covid, leaving governments little room to shield consumers from any future price spike, the IMF warned.

'Inventories in energy markets are dwindling and additional geopolitical shocks could still transmit rapidly through prices,' the IMF said — a direct warning that the worst may not yet have passed.