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. The agency notes that while 2025 benefited from favorable financing conditions, the escalation of conflict in the Middle East—specifically the disruption of the Strait of Hormuz—is now undermining these gains. Under a potential downside scenario, S&P warns that Brent crude could spike to $200 per barrel before averaging $130 in 2026, triggering a severe global energy and financial crisis.
The report emphasizes that the impact 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 tracked 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 logistics, exacerbated by tightening monetary policies and capital outflows.