--- title: "French Foreign Trade Bank: The duration of the Iran conflict is extended, and global economic growth is slowing down" type: "News" locale: "en" url: "https://longbridge.com/en/news/279219739.md" description: "The economic research team of the French Foreign Trade Bank released a report indicating that the Iran conflict has lasted nearly two weeks, leading to a slowdown in global economic growth and turmoil in financial markets. It is expected that if supply disruptions occur, Brent crude oil prices could soar to $119 per barrel, and European natural gas prices could rise to €108 per megawatt hour. The conflict has significant economic impacts on Asia, Europe, and the Americas, potentially exacerbating the risk of stagflation. A prolonged conflict will force the Federal Reserve to implement interest rate cuts, and Latin America will also face slowing growth and rising inflation" datetime: "2026-03-16T07:17:46.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/279219739.md) - [en](https://longbridge.com/en/news/279219739.md) - [zh-HK](https://longbridge.com/zh-HK/news/279219739.md) --- # French Foreign Trade Bank: The duration of the Iran conflict is extended, and global economic growth is slowing down The economic research team of the French Foreign Trade Bank published a research report titled "Middle East Conflict: Impact on the Global Economy and Financial Markets," mentioning that the Iran war has lasted nearly two weeks. Affected by the war, financial markets are turbulent, with disruptions in the energy market being particularly prominent. For oil and gas, the basic scenario assumed by the research team is a two-week supply interruption, with the average price of Brent crude oil expected to be $90 per barrel in March and April, and the average price of European natural gas (TTF) expected to be €50 per megawatt hour. If a severe and prolonged supply interruption occurs, the price of Brent crude oil could soar to $119 per barrel, and the price of European natural gas could rise to €108 per megawatt hour. In terms of oil, strategic reserves can somewhat alleviate the extent of price surges, while natural gas, due to its difficulty in storage and low reserve levels in various countries, lacks inventory as a buffer, meaning that the market and prices can only achieve balance through reduced demand. The metal market is also affected, with supply shocks driving up aluminum prices and causing severe shortages of sulfuric acid, which is a key raw material for the extraction of basic metals like copper and nickel. Gold initially surged as a safe-haven asset, and if the conflict is short-lived, gold prices may retreat to pre-war levels; however, if the war lasts too long, inflation may cause gold prices to rise again. In addition to metals, transportation disruptions also threaten freight and air travel demand. As the duration of the conflict extends, global economic growth will slow, trade conditions for oil-importing countries will deteriorate, and the risk of stagflation will increase. From a regional perspective, apart from the Middle East, Asia is the most directly affected, followed by Europe and the Americas. The long-term threat of conflict to Asian economies is reflected in rising energy and food prices, transportation disruptions, reduced remittances, and tightening financial conditions, which will exacerbate the difficulties faced by Asian economies. Europe faces inflation and growth risks, with the extent of impact depending on the duration of the conflict. A medium-term conflict may lead to sustained price increases and potential interest rate hikes, while a severe long-term conflict could result in stagflation and economic slowdown, necessitating tighter monetary policies. For the United States, a prolonged conflict will lead to sustained inflation and a severe slowdown in economic growth, forcing the Federal Reserve to implement four rate cuts. Latin America will face slowing growth, increasing inflation, and currency depreciation. The shocks brought about by geopolitical events are usually short-lived, with immediate impacts outweighing lasting trends for most asset classes. Since the war began, U.S. risk assets have performed well, while Asia and emerging markets have lagged. If the conflict is short-lived, the market is expected to shift towards Europe and emerging markets, with U.S. stock market performance in 2026 expected to be on par with European stock markets. In the foreign exchange market, investors seeking safe-haven assets have pushed up the dollar and Swiss franc, but the team expects the dollar to weaken in the long term, benefiting the euro and yen. In terms of interest rates, the team expects the sovereign bond spreads in the eurozone to widen, with a bearish outlook on Schatz (German short-term bonds). 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