The supply shock triggered by the Iran war is stirring global markets, but this time, the boundaries of the shock are much clearer than four years ago.
According to the Wind Trading Desk, Goldman Sachs pointed out in its global economic review report released on March 15 that this round of supply shock fundamentally differs from that of 2021 to 2022—instead of spreading throughout the supply chain, the current shock is highly concentrated in the energy sector, significantly reducing the risk of a repeat of secondary inflation effects.
Goldman Sachs stated that the blockade of the Strait of Hormuz has led to a sharp rise in oil and gas prices, which is expected to reduce global GDP by 0.3% and raise overall inflation by 0.5 to 0.6 percentage points over the next year. As a result, Goldman Sachs has lowered its global economic growth forecast from 2.9% before the war to 2.6%, and raised its global overall inflation forecast from 2.3% to 2.9%.
Meanwhile, the global front-end interest rate market has reacted first—since the outbreak of the conflict, the UK policy rate pricing for the end of 2026 has risen by 63 basis points, the Eurozone by 50 basis points, the US by 40 basis points, Canada by 39 basis points, and Australia by 31 basis points. Goldman Sachs has accordingly postponed its interest rate cut forecasts for several economies, including the US and the UK.
<h2>Energy Shock: Significant Scale, but Clear Boundaries</h2>
The blockade of the Strait of Hormuz is the core trigger of this crisis.
Goldman Sachs' commodities team has raised its oil and gas price forecasts and calculated the quantitative impact on the global economy: The rise in oil prices will pressure global GDP by 0.3%, and overall inflation will rise by 0.5 to 0.6 percentage points over the next year, while core inflation will only rise slightly by 0.1 to 0.2 percentage points. The simultaneous surge in natural gas prices will create additional price pressure and growth resistance for Europe and Asia.
Goldman Sachs pointed out that as long as the blockade of the Strait of Hormuz remains in place, the risks of the aforementioned impacts are skewed to the upside. This uncertainty is also the main driving force behind the market's repricing of central bank policy paths.
<h2>Key Difference from 2022: Narrower Scope of Supply Chain Shock</h2>
The inflation wave of 2021 to 2022 stemmed from a global supply chain crisis—rising energy prices were just one dimension, compounded by massive port congestion, failures in &#34;just-in-time&#34; inventory management, and widespread production bottlenecks.
Goldman Sachs believes that the structural characteristics of this round of shock are entirely different and supports this with three dimensions:
First, major economies have very limited exposure to non-energy trade with the Middle East. Non-energy exports from the Middle East account for only 1% of global trade, and the exposure of major developed markets and emerging market economies is generally lower. In contrast, the disruption of trade in East Asia after the pandemic affected over 20% of global trade. This comparison clearly illustrates that the scale of the supply chain shock triggered by this war is far less than during the pandemic.
Second, bottleneck risks in the chemical and metal sectors are limited, and the inflation impact is quantifiable and relatively small. Gulf countries hold a significant share of global production in certain chemical and metal products, including helium, sulfur, methanol, polyethylene, ammonia, nitrogen, and aluminum. However, these products generally account for no more than 0.2% of global GDP, with Gulf countries' production share falling below 0.02% of global GDP. In contrast, the trade scale affected by the global semiconductor production disruptions in 2022 was about 1% of global GDP
Goldman Sachs estimates that even if the prices of the aforementioned chemical and metal products maintain their current spot levels (with an average increase of about 25%), the overall inflationary impact on the global economy would only be about 0.1 percentage points.
In specific categories, Goldman Sachs believes that methanol is the most noteworthy potential risk point—Iran accounts for about 20% of global methanol production capacity, and a permanent loss of this capacity could have a cascading effect on downstream acetic acid, industrial adhesives, and coatings production. Although helium is a key input for semiconductors and aerospace, communication between Goldman Sachs and stock analysts indicates that helium supply contracts are generally long-term fixed contracts, and the inventory reserves of several large producers are sufficient to offset the impact of supply disruptions in the foreseeable future.
Third, the shipping bottlenecks of 2021 to 2022 are unlikely to be repeated. Goldman Sachs points out that Gulf countries are not major transshipment trade hubs for most commodities (except for yachts and other vessels), so disruptions in transshipment have limited effects on other commodities. From real-time data, the Baltic Dry Index shows that since the outbreak of the war, non-tanker shipping rates have actually decreased slightly. Although air freight prices have risen significantly due to disruptions in the Middle Eastern airspace—with average freight rates between Asia and North America/Europe increasing by about 25%—Goldman Sachs estimates that this would only raise global inflation by about 3 basis points.
<h2>Central Bank Policy: Cautious but Not Fully Shifting</h2>
The significant repricing of front-end interest rates reflects market concerns about the central bank's policy path—the memory of post-pandemic runaway inflation remains vivid, and the market expects central banks in various countries to remain highly vigilant against any inflation signals.
Goldman Sachs states that the scale of the energy shock is indeed sufficient to prompt central banks to adopt a cautious stance, and has correspondingly delayed interest rate cut forecasts for several economies, including the United States and the United Kingdom. However, Goldman Sachs also emphasizes that the core mechanism behind the runaway inflation of 2021 to 2022 was the widespread spread of supply shocks leading to large-scale secondary effects, while the current shock's narrow characteristics significantly reduce this risk.
Goldman Sachs further notes that research from its European economic team also indicates that the sensitivity of the European economy to energy shocks has decreased compared to 2022. However, if the energy crisis escalates further, the nonlinear effects of energy cost transmission and inflation expectations remain tail risks that cannot be ignored

CRAK

Goldman Sachs pointed out that the blockade of the Strait of Hormuz caused by the Iran war will drag down global GDP by 0.3%, raising inflation by nearly 0.6 percentage points, and forcing many countries to delay interest rate cuts. However, unlike in 2022, this round of shocks is highly concentrated in the energy sector, with limited supply chain spillover effects, and the risk of secondary inflation spiraling out of control is far lower than the level implied by market panic

- The recent supply shock from the Iran war is causing turmoil in global markets, particularly affecting energy prices due to the blockade of the Strait of Hormuz.  
- Goldman Sachs has projected that this shock will decrease global GDP by 0.3% and raise overall inflation by 0.5 to 0.6 percentage points, while adjusting its growth forecast down from 2.9% to 2.6%.  
- Unlike previous supply crises, this disruption is more narrowly focused, minimizing risks of secondary inflation effects, although rising commodity prices still pose challenges for economies globally.

What is different about this round of energy crisis compared to 2022?