By New York Post (World News) | Created at 2026-06-03 19:10:50 | Updated at 2026-06-07 20:26:52
4 days ago
President Trump and Iran have one month to reopen the Strait of Hormuz and get oil flowing again if they want to avoid a worldwide economic slowdown for the next two years, according to projections released Wednesday by the Organization for Economic Cooperation and Development (OECD).
Already, global economic growth is expected to be significantly lower this year than it was last year — and it could plunge by more than a third if the a key oil chokepoint remains shut, according to the group, which aims to promote freedom, economic growth and social wellbeing in member countries, including the US.
“The global economy entered 2026 with robust momentum, but the outlook has weakened significantly since the start of the conflict in the Middle East, with effects likely to be felt for some time,” OECD Secretary-General Mathias Cormann said in a statement.
“The longer the disruptions last, the larger the economic and social costs become,” he added.
Under the OECD’s predictions, global economic growth would sink to 2.1% this year, down from 3.4 % in 2025 if the strait is not opened for good.
Global economic growth would then plummet to 1.8% in 2027, likely pushing many nations into or close to a recession.
The hardest hit nations would be in Asia, which are the most dependent on crude oil and natural gas from the Persian Gulf, whose supplies have been closed off by Iran, the OECD warned.
If the war ends in June and fuel disruptions are quickly addressed and the flow of oil and gas return to their pre-war levels, then the global economy has a chance to rebound and grow by 3.1% next year, the organization added.
The OECD’s prediction comes as negotiations between the US and Iran remain heated over the terms of how to end the war, with attacks continuing in the Persian Gulf this week despite a cease-fire.
US inflation increased at its fastest pace in three years in April, with the personal consumption expenditures price index jumping 3.8% in the last 12 months through April, the largest rise since May 2023, the Commerce Department’s Bureau of Economic Analysis said.
Fuel prices also shot up 12.3% in April, according to the US Energy Information Administration, with gasoline prices up more than 50% since the war started on Feb. 28.
The OECD projected that the US economy would grow by 2% this year, and 1.8% next year. That’s slightly better than the projections than before the war, when the OECD had projected 1.7% growth in 2026 and 1.9% for 2027.
Iran, meanwhile, saw the value of its rial currency plummet to a record low of 1.9 million rials to $1 at the end of April, with inflation up at more than 53%. More than 3.5 million Iranians have also been affected by mass layoffs across the country.
Both the US and Iran are betting that they can outlast each other in what Tehran dubbed an “economic battlefield.”
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