In its latest Global Trade Outlook, the World Trade Organization stated that the war and its impact on energy and fertiliser costs is the main risk to the global economy. According to the WTO, the WTO expects the growth rate of global goods trade to slow sharply this year to 1.9%, even without a prolonged energy shock. The WTO's expectations for trade growth are conditional on energy prices, with risks 'tilted to the downside.' Risks to the forecast are tilted to the downside and mostly linked to the Middle East conflict through higher energy prices, which could weigh heavily on output and trade unless short-lived. A year-long period of high energy prices would knock an additional 0.5% off goods trade growth and jeopardise food security. The Gulf region is a major exporter of energy and fertilisers, and a prolonged supply interruption could ripple across food systems, exacerbating pre-existing export restrictions.
WTO chief economist Robert Staiger warned that an extended period of high oil prices due to war in the Middle East could 'crimp' the AI boom, as the boom is energy-intensive. The AI boom's impact is described as a 'possible interaction' and 'could put a crimp', with uncertainty noted due to the technology being 'unproven' and investment concentrated in large firms. This warning comes despite AI investment in 2025 helping offset the hit to global trade from Donald Trump's tariffs, according to WTO data. In the first three quarters of last year, about 70% of all investment growth in North America was accounted for by AI-related goods, based on WTO calculations. For comparison, in the three years before the 2008 US housing crash, property made up 30% of investment growth.
World trade in goods expanded by 4.6% in 2025, despite Trump's protectionist policies, helped by strong exports from Asian economies. However, the WTO has struggled to maintain its relevance in Trump's second term as the US has unleashed tariffs regardless of WTO rules, and rival economies have broken commitments in deals with Washington. The WTO's outlook highlights that the Middle East conflict poses a dual threat: directly through energy price spikes and indirectly by potentially stifling key technological investments like AI. The organization notes that while AI has been a significant driver of recent economic activity, its vulnerability to energy costs underscores broader economic fragilities. This situation complicates global trade recovery efforts, as policymakers must balance support for innovation with managing inflation and supply chain disruptions. The report serves as a cautionary note for governments and businesses to prepare for potential energy market volatility and its cascading effects on trade and investment.