The escalating conflict in the Middle East has knocked the ‌global economy off a stronger growth path, the OECD warned on Thursday, as a near-halt in energy shipments through the Strait of Hormuz threatens to push inflation sharply higher, Reuters reported. The Paris-based Organisation for Economic Cooperation and Development said the global economy had been on course for stronger-than-expected growth before the war in Iran erupted, but that prospect has now all but disappeared.

The clues started emerging in November 2024, a trail of evidence that pointed to possible financial crimes involving a vendor for Binance, the world’s largest cryptocurrency exchange. Some clues were in plain sight, found in public business records in Singapore and Hong Kong, on a U.S. trade blacklist, and in Binance transaction logs that showed hundreds of millions of dollars flowing through the account of a 78-year-old Chinese man.

Two Dubai property developers have seen their Islamic bonds, or sukuk, fall into distressed territory, with investor concern mounting over credit quality and refinancing risks as the war in the Middle East rolls on for a fourth week, Bloomberg reported. Six dollar-denominated sukuk issued by property firms are indicated at distressed levels or trading with a yield spread of over 1,000 basis points above the risk-free rate, according to data compiled by Bloomberg. In total, they represent about 15% of dollar real estate bonds in the Middle East.

Business activity in the U.S., Europe and parts of Asia slowed this month as energy prices and uncertainty were driven higher by the war in the Middle East, while a cooling of new orders pointed to longer-lasting harm if the conflict continues or escalates, the Wall Street Journal reported. Data firm S&P Global said Tuesday that its U.S. composite purchasing managers index fell to an 11-month low of 51.4 in March, compared with 51.9 in February.

Dubai's property market is beginning to show early ​signs of weakening nearly three weeks into the U.S.-Israeli war on Iran, with data from analysts showing tanking transaction volumes and some real estate agents ‌pointing to price reductions, Reuters reported. The war, and Tehran's strikes against Israel, U.S. bases and Gulf states including the United Arab Emirates, have pierced Dubai's image as a safe haven for the world's wealthy.

Saudi Arabia’s oil officials are working frantically to project how high oil prices might go if the Iran war and its disruption of energy supplies doesn’t end soon—and they don’t like what they are seeing, the Wall Street Journal reported. The base case, several oil officials in the Gulf’s biggest producer said, is that prices could soar past $180 a barrel if the disruptions persist until late April. While that would sound like a bonanza for a kingdom still heavily leveraged to oil revenue, it is deeply concerning.

Europe’s top central bankers warned that the escalating war in the Middle East would drive up inflation and knock growth, the Wall Street Journal reported. The conflict is threatening the global economy, but Europe is seen as particularly vulnerable because of its dependence on imported energy. European-natural gas prices have nearly doubled since the conflict began. “The war in the Middle East has made the outlook significantly more uncertain, creating upside risks for inflation and downside risks for economic growth,” ECB President Christine Lagarde said on Thursday.

Battered by Iranian strikes and the disruption of the Strait of Hormuz, the United Arab Emirates and some fellow Persian Gulf states have come to view Iran’s theocracy as an existential enemy. They now want the regime they once courted to be neutered, if not dismantled, when the conflict ends—so the ordeal is never repeated, the Wall Street Journal reported. The U.A.E. has borne the brunt of Iranian attacks: More than 2,000 drones and missiles have been fired at the country since the U.S. and Israel launched the war on Feb. 28.

Europe’s central bankers will be in a familiar but uncomfortable position when they meet to decide policy Thursday: waiting for the fog of war to clear a little before they can pick out a safe path forward, the Wall Street Journal reported. Policymakers at the European Central Bank, the Bank of England, and their counterparts in Sweden and Switzerland are expected to leave their key interest rates unchanged. As the conflict initiated by the U.S.

The conflict in the Middle East may force the hand of Brazil’s central bank, and not in a good way. The central bank has heavily foreshadowed a rate cut on March 18. However, the escalating war in the Middle East may throw cold water on those plans, and Brazil’s market rally, the Wall Street Journal reported. “If oil prices start climbing high or [if] they stay high, then, yes, the central bank might hold,” Juan Egaña, a strategist at BCA Research, said. "Brazilian markets have rallied so much in expectation that monetary easing is coming,” said Egaña.