Scenario 1: Conflict ends in first half of 2026<\/p>\n
In the most optimistic scenario, negotiations between the opposing sides lead to a resolution within the first half of 2026, bringing an end to military clashes.<\/p>\n
Energy and transport infrastructure would gradually recover, allowing supply conditions to normalise. As a result, global energy and commodity prices would begin to decline steadily in the second half of 2026.<\/p>\n
Under this scenario:<\/p>\n
\n\tDubai crude oil is projected to average US$90 per barrel in 2026 and US$75 in 2027
\n\tInflation would stand at 2.9% in 2026, easing to 1% in 2027
\n\tGDP growth is forecast at 1.4% in 2026, rising to 2.2% in 2027
<\/p>\n
Scenario 2: Prolonged conflict leads to stagflation<\/p>\n
In a more adverse scenario, the conflict drags on and is expected to end only in the second half of 2026.<\/p>\n
Exports of energy and commodities from the Middle East would remain constrained, keeping energy prices elevated throughout 2026.<\/p>\n
This would disrupt global supply chains and push several economies into stagflation, characterised by weak growth combined with high inflation.<\/p>\n
Rising global inflation pressures could prompt central banks to maintain tight monetary policies, further weighing on economic activity.<\/p>\n
Under this scenario:<\/p>\n
\n\tDubai crude oil is projected to average US$110 per barrel in 2026 and US$95 in 2027
\n\tInflation would rise to 4.6% in 2026, before easing to 1.5% in 2027
\n\tGDP growth would slow to 0.8% in 2026, recovering slightly to 2.0% in 2027
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