Oil at $73 and falling fertilizer costs - but IMF warns full recovery will take time | The latest National and International News - upday News
Energy and commodity prices have fallen since the United States and Iran agreed to halt hostilities and reopen the Strait of Hormuz. However, the International Monetary Fund warns that full normalization of prices and trade flows in the Persian Gulf will require time. | The latest National and International News - upday News
Energy and commodity prices have fallen since the United States and Iran agreed to halt hostilities and reopen the Strait of Hormuz. However, the International Monetary Fund warns that full normalization of prices and trade flows in the Persian Gulf will require time. IMF spokesperson Julie Kozack said Thursday that the recovery depends on the ceasefire remaining in effect. The Fund will decide on July 8 whether to maintain the three economic growth scenarios it presented in April, which were contingent on the war's outcome. Brent crude oil futures for August delivery traded around $73 per barrel on Thursday, marking the lowest level since before the US war against Iran began on February 28. Prices for urea, fertilizers and base metals have also decreased with the resumption of shipments from Persian Gulf countries. Previous crisis scenariosWhen the Strait of Hormuz remained closed in May, Kozack had warned that the global economy was shifting from a favorable reference projection to an "adverse scenario. " That scenario assumed a rapid end to the conflict and projected 2. 5 percent global growth for 2026, with average oil prices of $100 per barrel. Kozack reported Thursday that inflationary expectations remain well-anchored, as several central banks have raised interest rates. Financial conditions have stayed accommodative, allowing countries in advanced and emerging markets to access international financial markets. Concerns for developing nationsThe IMF remains particularly concerned about the conflict's impact on developing countries that import energy and have limited fiscal reserves or commodity stocks. African nations face especially acute challenges from the crisis. Kozack emphasized that complete normalization will take time due to delivery lead times to final destinations. The recovery timeline assumes the ceasefire holds. Note: This article was created with Artificial Intelligence (AI).