At this year's Milken Global Conference 2026, warnings emerged that while the U.S. economy is riding a wave of massive artificial intelligence (AI) investment, developing countries could plunge into severe recession due to the Middle East war. Major oil companies and international organizations pointed out that global crude oil inventories are being depleted faster than they appear on the surface, urging countries to encourage consumption restraint.
Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), who appeared on a conference panel Tuesday, said, "If the war continues into next year and oil prices remain above $125 per barrel, the outcome will be much worse." Brent crude currently trades in the $114-$115 per barrel range. Last month, when the IMF released its world economic outlook, it lowered this year's global growth forecast to 3.1% from 3.3%, assuming the Middle East situation would be short-lived—but Georgieva's remarks suggest further downgrades are possible.
"Fertilizer prices have risen 30 to 40 percent in a year, and this will soon push food prices up by 3 to 6 percent," Georgieva said. "The U.S. and China can weather it, but sub-Saharan African countries without fiscal capacity could fall into deep economic recession." She added, "When supply declines, demand must also decline, but policymakers are encouraging consumption as if the war will end soon. Energy-vulnerable countries will inevitably take a hit."
Mike Wirth, CEO of Chevron, the U.S. energy giant, also stressed that the worst-case scenario of intensifying upward pressure on oil prices must be considered. "In the early stages of the Middle East crisis, crude oil inventory levels were high enough to absorb the supply shock, but that buffer is now being rapidly depleted," Wirth said. "Actual spot prices are much higher than the Brent futures prices cited by the media." He predicted, "If we fail to send the signal to 'cut consumption,' the situation will worsen even if a 'price cap' is introduced." ExxonMobil and Chevron, the largest U.S. energy companies, announced that their first-quarter net profits fell 46% and 37% year-on-year, respectively, due to a sharp drop in Middle East production.
Mohamed Kande, Global Chairman of PwC, the global accounting and consulting group, said, "Consumers in the U.S. and Europe only worry about gas bills, but for the Global South—emerging and developing countries in the Southern Hemisphere and low-latitude regions of the Northern Hemisphere—energy is a matter of survival." He predicted, "Factories in Vietnam and Indonesia are seeing their very power supply become precarious, and manufacturers will pass on 40% higher energy costs to consumers."
