These EM Countries Face Greatest Risk If Energy Shock Spreads

The most immediate economic risk to the global economy from the chaos at the Strait of Hormuz chokepoint is a surge in energy prices, with Brent crude rising to around $92/bbl and WTI futures at $90/bbl. The second-order effects are important to understand: a sustained energy shock would almost certainly add to inflationary pressures while acting as a drag on economic growth across both developed and emerging economies. 

Barclays analyst Bum Ki Son in Singapore told clients that his Middle East scenarios envision a broader air campaign than in 2025, but no ground invasion and no full regional war; the scenario is still intact. He said the base case is that fighting stays mostly confined to Iran and Israel, disruption in the Strait of Hormuz persists for several weeks, and the geopolitical risk premium in energy remains higher for longer than past flare-ups.