TThe OECD has laid out two very different economic outlooks for global trade in its latest economic forecasts.
The report’s scenario analysis shows that the course of disruptions associated with energy flows in the Middle East will determine not only growth, but the structure and resilience of global trade itself.
At the heart of the OECD forecast lies the difference. On the one hand, there is a “time-limited disruption scenario” where supply chains gradually return to normal. On the other hand, there is a “prolonged disruption scenario” that implies persistent supply shocks, structural damage to trade networks, and a realignment of global trade.
Even in the most optimistic case, global trade is expected to lose momentum.
The OECD predicts that “global trade growth is expected to decline from 5.0% in 2025 to 3.1% in 2026, then slow further to 2.9% in 2027.”
This slowdown reflects the direct and indirect effects of power outages. Maritime checkpoints and rising shipping costs are already affecting flows, especially between Asia, Europe and the Middle East.
The report notes that trade weakness will be driven by “a sharp decline in trade with Gulf economies and increased energy and transportation costs.” These factors illustrate how input shocks, not demand contractions alone, are now driving trade outcomes.
However, the offsets remain. Lower US tariff rates and continued demand for AI-related goods are expected to help “sustain inclusive global growth.” This highlights the bifurcation within trade itself: while commodity-related and energy-intensive flows weaken, technology-based trade continues to provide momentum.
Scenario difference
The two scenarios proposed by the Organization for Economic Cooperation and Development depend on the duration of the interruption of supplies coming from the Gulf. In the base case, energy production recovers from mid-2026, allowing shipping routes and production networks to gradually stabilize. Under this path, shortages remain “limited and short-lived,” and global trade adjusts rather than structurally contracts.
In contrast, a prolonged disruption scenario represents a fundamentally different trading environment. The report assumes that energy prices will remain “50% higher” for an extended period, accompanied by “higher global supply shortages that disrupt production in importing and exporting countries.” For global trade, this translates into supply-side rationing and systemic inefficiencies.
Indeed, the OECD warns that shortages of vital inputs would “lead to forced energy rationing for businesses”, along with weakening confidence and tightening financial conditions. These conditions would put pressure on supply and demand for traded goods, leading to what trade economists consider a two-sided shock.
One of the most important consequences for global trade is the deepening fragmentation of supply chains.
The OECD highlights how disruptions in key inputs – particularly those concentrated in the Gulf region – spread across global production networks.
The report notes that the region is a major source not only of hydrocarbons but also of industrial inputs such as fertilisers, petrochemicals and gases. As a result, “shortages begin to impact across a range of supply chains, as substitutes are not readily available for many products.”
Semiconductor, agricultural and chemical production all depend on inputs produced or processed in the region. In a long-term disruption scenario, these sectors face ripple effects: scarcity of inputs, rising costs, and delayed production cycles.
Moreover, indirect dependencies amplify the shock. The OECD emphasizes that “indirect links across supply chains account for a large share of total exposure and often exceed direct dependence.” This means that even economies with limited direct trade links with the Gulf region are at risk through trade in intermediate goods.
The geography of trade is changing under pressure
The scenarios also point to a reshaping of the geography of global trade. In the time-limited case, Asian economies experience more turbulence in the short term but recover along with energy flows. Strong export growth continues in dynamic Asian economies, especially in the technology sectors.
However, in the long-term scenario, these same economies become the center of trade contraction.
The OECD notes that “several economies in Asia are likely to be severely affected, reflecting their relatively high dependence on energy inputs from Gulf economies.” This is important given Asia’s central position in industrial supply chains.
At the same time, energy exporters can make temporary gains by improving terms of trade, although these terms are restrictive if production itself is disrupted. On the other hand, import-dependent emerging markets face deteriorating balances and rising financing costs, which may limit their participation in global trade.
The OECD scenarios highlight long-term structural shifts in trade policy. The vulnerability of supply chains to a single geographic choke point has highlighted the need for diversification. The report calls for efforts to “enhance the resilience of supply chains” and reduce reliance on concentrated sources of supply.
This has direct implications for trade agreements and industrial policy. Governments are likely to prioritize supply chain security, which could lead to a reshaping of sourcing strategies, investment flows and trade partnerships. The focus on flexibility may accelerate trends toward regionalization and “buddy support” in critical industries.
At the same time, the OECD stresses the importance of maintaining openness. He warns that export restrictions and protectionist measures “only exacerbate global product shortages and raise prices.” For trade policymakers, this represents a delicate balance between flexibility and openness.
Ultimately, the OECD scenarios suggest that global trade is entering a phase defined less by tariffs and more by supply risks, energy security and geopolitical uncertainty. As the report concludes, “growth prospects depend on many factors, including the degree of damage to energy infrastructure… and the time it takes for normal trade patterns to resume….” For the global trading system, these timelines will determine whether 2026 represents a temporary disruption – or the beginning of a more structural transformation.
Source: OECD, Baltic Stock Exchange
