S&P Global Warns of ”Disproportionate” Impact on Emerging Markets Amid Middle East Conflict; Oil Could Peak at $200
A new report by S&P Global Ratings titled “Credit FAQ: How the Middle East War Will Test Emerging Markets” highlights a precarious outlook for developing economies as geopolitical tensions escalate. The agency notes that while 2025 benefited from favorable financing conditions, the current disruption of global supply chains—specifically the potential closure of the Strait of Hormuz—is undermining macroeconomic gains. Under a severe downside scenario, S&P warns that Brent crude could spike to $200 per barrel in 2026, triggering a localized and global credit crisis.
The report emphasizes that the shock remains uneven, with energy-importing nations such as Egypt and Turkey facing the steepest challenges. In a prolonged conflict scenario, these nations could see GDP growth slashed by 2 to 3 percentage points, while inflation could surge by over 5 percentage points. S&P has already identified four conflict-related rating actions, noting that credit stress is likely to migrate from energy-intensive sectors like refining and aviation into broader manufacturing and agriculture, exacerbated by tightening monetary policies and capital flight.
