Markets Resilient Amid Middle East Conflict Risks

Global financial markets have shown resilience in the face of escalating conflict in the Middle East, but international institutions warned on Monday that intensifying risks could threaten stability, as finance officials gathered for the International Monetary Fund and World Bank spring meetings in Washington.

The conflict, which erupted on February 28 with a U.S. military blockade of ships leaving Iranian ports and subsequent breakdowns in ceasefire talks, has disrupted oil shipments through the Strait of Hormuz, the world's critical energy chokepoint. This has triggered sharp rises in energy prices, with local petrol costs surging more than 50 percent and diesel over 70 percent in countries like Nigeria. The International Monetary Fund anticipates downgrading global growth forecasts while raising inflation projections, with emerging markets and developing economies facing the hardest hits due to heightened vulnerabilities.

Tobias Adrian, director of the IMF's monetary and capital markets department, presented the fund's Global Financial Stability Report during a news conference, noting that markets have functioned in an orderly manner despite bouts of volatility from the war's...