IMF: Oil Prices Unlikely to Fall Quickly Even if Hormuz Strait Recovers

The International Monetary Fund (IMF) has forecast that global crude oil prices will not be able to fall rapidly to levels seen before the military strikes by the United States and Israel on Iran. This condition is predicted to persist even if shipping traffic through the Strait of Hormuz begins to recover by mid-July, IMF Director of Communications Julie Kozack said during a press briefing on Thursday. A day earlier, the IMF published an update to its global oil price projections. In the report, average world oil prices are forecast to surge by almost a third in 2026, reaching 89.27 US dollars per barrel, before correcting to 78.7 dollars per barrel in 2027. “We are not assuming that the situation will immediately return to the pre-war normal,” Kozack said when providing the Fund’s assessment of the global oil market. Despite renewed tensions in the Middle East, the IMF remains cautiously optimistic that shipping traffic in the strategic Strait of Hormuz region will begin to improve this month. However, Kozack added that the IMF will continue to incorporate the latest regional dynamics and commodity market conditions into its projection calculations going forward. The latest escalation was triggered by massive US airstrikes on Iran in the early hours of Wednesday. US Central Command (CENTCOM) claimed the operation was a retaliatory action against Iran for allegedly disrupting commercial vessels transiting the Strait of Hormuz. In response, the Iranian military immediately launched counter-strikes against US military bases in Bahrain and Kuwait. The Iranian government also accused Washington of violating a previously agreed memorandum on the cessation of hostilities. The situation intensified further after US President Donald Trump officially declared on Wednesday morning that the ceasefire agreement with Iran was no longer in effect.