In response to the Middle East economic impact, three major international organizations announce: formation of a coordination team!

According to Xinhua News Agency, on the 1st, the heads of the International Energy Agency, the International Monetary Fund, and the World Bank issued a joint statement agreeing to establish a coordination group to maximize the roles of each organization in responding to the impact of the Middle East conflict on energy and the economy.

The three organizations jointly issued a statement stating that they will share data, coordinate policy recommendations, and mobilize relevant stakeholders to support countries in need, while also assessing potential financing needs of various countries. The leaders of the three organizations stated in the statement, “The scale of this shock is enormous, affecting the entire globe, and highly asymmetric. Energy-importing countries—especially low-income countries—are hit particularly hard.”

Brent crude oil was reported at about $100 per barrel on Wednesday, roughly 40% higher than the price before the U.S.-Israel joint strike on Iran on February 28. The leaders of the three organizations also pointed out that supply chains for helium, phosphates, aluminum, and other bulk commodities have been affected, and international air travel has also been impacted.

This spring, the International Monetary Fund and World Bank annual meetings will be held from April 13 to 18, and the Middle East situation and its economic impact are expected to be key topics for policy makers to discuss.

Three organizations join forces: sharing data and assessing financing gaps

According to the joint statement released on Wednesday, the International Monetary Fund, the World Bank Group, and the International Energy Agency have reached an agreement on a coordination mechanism, mainly covering cross-agency data sharing, unified policy advice, and assessment of potential financing needs for affected countries.

This joint action by the three organizations marks a shift in the multilateral system’s approach to systemic economic risks triggered by geopolitical conflicts, replacing a fragmented response with a coordinated mechanism. Against the backdrop of ongoing Middle East conflicts disrupting global commodity markets, external financing pressures on low-income economies are rising sharply.

Energy shock spillover: food security risks emerge

The economic impact of the Middle East conflict has spread from energy markets to food and fertilizer sectors. The International Monetary Fund warned in a blog post on Monday that soaring energy prices are further driving up food inflation, affecting multiple countries from the Middle East to Latin America, with low-income economies facing food insecurity risks.

The leaders of the three organizations specifically pointed out that disruptions in the supply of crop nutrients (fertilizers) from the Persian Gulf region, coinciding with the start of spring planting in the Northern Hemisphere, could threaten the year’s harvest. Meanwhile, both oil and gas prices and fertilizer prices are rising simultaneously, further exacerbating external vulnerabilities in some developing economies.

The establishment of this coordination mechanism among the three organizations sets the agenda for the upcoming spring meetings of the International Monetary Fund and World Bank. The meetings will be held from April 13 to 18, where finance ministers and central bank governors from major economies worldwide will gather.

Analysts expect that participants will have in-depth discussions on the spillover effects of energy shocks, targeted fiscal support tools, and emergency financing arrangements for low-income countries. The three organizations previously stated that they will jointly assess countries’ financing needs, which also suggests that specific aid plans may be further implemented during the annual meetings.