Global Economy Is Running Out of Wiggle Room

For a while now, the global economy has been beating the odds.

The energy shock prompted by the American and Israeli attacks on Iran in February set off the largest disruption of worldwide energy flows in history. Yet despite jumps in oil prices, widening conflict in the Middle East, fuel shortages and inflation pressures, the feared crash never came and most economies managed to muddle through.

But wiggle room is narrowing at the same time the outlook is darkening. Look at what has happened in just the last few days.

Attacks forced Saudi Arabia to shut a vital pipeline. Houthi militia seized a strategic Red Sea island and a port city, which could further restrict shipping in the region. And proposed negotiations among Gulf nations fell apart. Oil prices have shot toward $110 a barrel.

The price spike has caused rolling blackouts, rationing and angry protests from Asia to Latin America. In the Philippines, fisherman docked their boats because they can’t afford fuel. In Bangladesh, power outages caused hourslong work stoppages at factories. In Guatemala, protesters burned tires and cars.

Article source: https://www.nytimes.com/2026/09/17/business/economy/iran-war-energy-prices.html