2026 Global Macro Forecast: The Middle East Conflict and Other Trends You Can’t Ignore 

Webinar Overview 

On March 19, 2026, Expana VP of Price Forecasting Tom Bundgaard delivered a live macro forecast webinar in response to the escalating Middle East conflict. Brent crude had surpassed $112 per barrel following Iranian attacks on energy infrastructure, up from $103 just days prior. Bundgaard assessed what this means for global commodity markets, inflation, and GDP. 

Meet the Speakers: 

• Tom Bundgaard – Vice President of Price Forecasting, Expana
• Simon Duke – Managing Editor, Expana

Image source: Adobe

Energy Market Impact: Crude Oil and the Cascade 

The most immediate effect of the conflict has been a sharp rise in energy prices. Brent crude reached $112/barrel at the time of recording, with Iranian forces continuing to target oil and gas infrastructure and disrupt commercial shipping across the region. 

Bundgaard outlined how the energy shock transmits through the broader economy: 

• Crude oil and natural gas prices rise, pushing up input costs across plastics, aluminium, fertilizers, and transportation 

• Higher input costs flow through to producer price inflation (PPI) and consumer price inflation (CPI) 

• Rising inflation makes it harder for central banks to cut interest rates; in a more severe scenario, rates go up 

• Higher rates and higher inflation reduce household disposable income as fuel and energy costs rise 

• Reduced consumer spending weighs on GDP growth 

Expana’s forecasting models had already flagged rising crude oil price risk earlier in the year, identifying December 2025 prices as unsustainably low. Clients who acted on that analysis in January 2026 secured hedging positions for the full year before the current price spike. 

GDP Outlook: Scenarios and Downside Risk 

EU GDP growth currently stands at approximately 1.45%, with US growth at 2.03%. After a period of divergence, the two have recently converged and are now moving together.  

Bundgaard’s base estimate is a decline of roughly one percentage point in EU GDP growth. At around 0.45%, that would represent a significant slowdown but stop short of a technical recession. He was clear that this estimate carries real uncertainty, and holds only if the conflict does not extend well beyond summer 2026. 

Duration is the critical variable 

Iran’s strategic interest is in prolonging the conflict, not resolving it quickly. Attacks on energy infrastructure and commercial shipping point to a strategy of sustained economic disruption rather than rapid escalation toward a decisive outcome. 

Even if hostilities end soon, the logistical recovery is substantial. Bundgaard estimates a minimum of four months after conflict resolution before supply chains normalise, accounting for mine clearance, the restoration of shipping insurance rates, and port congestion. Meaningful recovery is unlikely before Q3 2026. 

Market adaptability as a partial offset 

Commodity markets have a strong track record of finding their way around supply disruptions. Europe replaced Russian gas with US LNG after 2022, despite the significant logistical complexity involved. 

In the current situation, alternative pipelines and rerouted shipping could offset around 40 to 50% of the disrupted supply volume. That matters, but it reduces the problem rather than solving it. 

Recession Risk: The Indicators Most Forecasters Are Ignoring 

Bundgaard separated macro risks into two categories: unpredictable, high-impact events (black swan events) and well-documented risks that are visible in advance but tend to be underweighted in mainstream analysis (grey rhinos) 

The Middle East escalation falls into the first category. Two other indicators, currently getting limited attention, fall into the second. 

US unemployment 

Going back to the 1950s, every sustained rise in US unemployment has been followed by a recession. Unemployment is currently rising. Bundgaard acknowledged this cycle could prove to be an exception, but noted the historical record offers no precedent for a sustained unemployment increase that did not eventually lead to a recession. 

Inverted Treasury yield curve 

The US Treasury yield curve has inverted ahead of every recession on record, a pattern supported by more than 100 years of data. Bundgaard noted that this indicator tends to get attention when the inversion first occurs, then drops out of the conversation as months pass without an immediate downturn. The recession arrives later anyway. 

Both indicators point to elevated recession risk in the second half of 2026. 

Compounding Macro Stress: Four Shocks at Once 

The Middle East conflict is the fourth major shock to hit the global economy in a short period. The previous three were: 

• Weak underlying macro fundamentals: slowing growth, compressed consumer demand, and the unemployment and yield curve signals described above 

• Tariff pressures, which the global economy absorbed without tipping into recession, despite predictions of significant economic impact 

• The Ukraine-Russia conflict 

Bundgaard’s view is that the energy disruption alone is unlikely to trigger a recession. The concern is cumulative: each additional shock reduces the economy’s capacity to absorb the next one. The longer the conflict runs, the higher the probability that all three together push the economy into contraction. 

Expana’s models have consistently assigned a higher probability to a genuine growth slowdown than the consensus forecast. Most economists Bundgaard tracks still point to stable growth as the base case. His models favour a decline scenario, and that gap from consensus has become harder to dismiss in recent weeks. 

Indicators to Monitor 

Bundgaard identified five variables worth tracking closely in the coming months: 

• Crude oil price trajectory: whether the current spike stabilises or continues rising as supply disruption persists 

• Conflict duration: the single most important determinant of economic impact; a short conflict has limited lasting effect, a prolonged one does not 

• Inflation data (CPI and PPI): the speed at which energy costs transmit into consumer prices will determine the pressure on interest rates 

• US unemployment and the Treasury yield curve: both warrant closer attention than they are currently receiving 

• Logistical recovery indicators: shipping insurance rates, port congestion data, and rerouting volumes as proxies for supply chain normalisation 

Expana tracks all of the above on an ongoing basis, alongside more than 36,000 commodity price series globally. To gain access to Expana’s expert insights and world-leading commodity price forecasting – get in touch.