IMF: Energy and Commodity Prices Retreat After US-Iran Deal, but Full Normalization Will Take Time
N.R. Finch
IMF spokesperson Julie Kozack said energy and commodity prices have declined since the US-Iran ceasefire and reopening of the Strait of Hormuz, but full normalisation of prices and Gulf trade flows will take time; the July 8 World Economic Outlook update will be the fund's key formal reassessment.
Prices are falling — so why does the IMF say "not back to normal"?
After the US-Iran deal halted hostilities and reopened the Strait of Hormuz, energy and commodity prices have dropped.
But IMF spokesperson Julie Kozack stressed that prices and Gulf trade flows still need time to fully normalise.
This means → a ceasefire is only step one; shipping insurance, freight capacity, and inventory restocking must each recover in turn — prices will not snap back to pre-war levels overnight.
What happened during the May blockade?
The Strait of Hormuz remained closed through May, keeping benchmark oil above $100 a barrel.
Kozack said at the time that the global economy was drifting from the milder "baseline forecast" toward the "downside scenario".
In plain terms = the longer the war dragged on, the more the IMF leaned toward its worst-case path — global growth of just 2.5% in 2025.
Why is the July 8 report a pivotal moment?
The IMF will release its World Economic Outlook update on July 8.
That report will decide whether to keep the three growth scenarios laid out in April — scenarios that diverged precisely on how the Iran conflict would unfold.
This means → if the IMF judges the situation has materially eased, it may merge or retire the worst-case scenario; if not, the ceasefire has not truly changed the economic outlook.
Content is for reference only, not financial advice.