The heads of the International Energy Agency, International Monetary Fund, and World Bank are establishing a coordination group to enhance their collective response to the energy and economic consequences of the Middle East war.

Context and Impacts of the Crisis

The conflict has caused major regional disruptions and triggered one of the largest supply shortages in global energy market history. The impact is substantial, global, and highly asymmetric, disproportionately affecting energy importers, particularly low-income countries. The crisis is already transmitted through higher prices for oil, gas, and fertilizers, raising concerns about food prices. Global supply chains for commodities like helium, phosphate, and aluminium are affected, as is tourism due to flight disruptions at key Gulf hubs. The resulting market volatility, weakening currencies in emerging economies, and inflation concerns raise the prospect of tighter monetary policy and weaker growth.

Purpose and Focus of the Coordination Group

In this period of high uncertainty, the institutions deem it paramount to join forces to monitor developments, align analysis, and coordinate support for policymakers. This is especially critical for countries most exposed to the war's downstream impacts and those with limited policy space and higher debt levels. The group aims to safeguard global economic and financial stability, strengthen energy security, and support affected countries and people on a path to sustained recovery, growth, and job creation through reforms.

Key Functions of the Group

The group will perform three core functions:

1. Assess the severity of impacts across countries and regions through coordinated data sharing on energy markets and prices, trade flows, fiscal and balance of payments pressures, inflation trends, export restrictions of key commodities, and supply chain disruptions.
2. Coordinate a response mechanism that may include targeted policy advice, assessment of potential financing needs, and the related provision of financial support.
3. Mobilise relevant stakeholders, including other multilateral, regional, and bilateral partners, to deliver coordinated and efficient support to countries in need. The group will work with and draw on other international organisations' expertise as required.