The World Trade Organization's recent annual Global Trade Outlook and Statistics report analyzed 2025 global trade patterns and projected this year's trade trajectory, specifically presenting a baseline growth scenario that excludes energy price shocks.

In an interview, WTO Chief Economist Robert Staiger explained the reasoning behind the report. The Middle East conflict emerged as the organization's trade outlook report was nearing completion, raising questions about how such significant global geopolitical tensions influenced their assessment and how economists develop forecasts for different scenarios.

Staiger responded that weeks before the report's release, they were already aware of the potential for conflict in the Middle East, so when hostilities began, it wasn't entirely unexpected. Based on this awareness, they had prepared an analysis accounting for the possibility of conflict.

"If the conflict is short-lived, the impacts would likely be temporary with a quick recovery anticipated," Staiger noted. "However, should the crisis persist long-term, it could trigger structural increases in fuel and transportation costs, reduced transshipment activity, and shifts in global travel and trade patterns toward alternative routes."

Regarding oil prices, Staiger acknowledged this as the most challenging variable to predict. The assumption is that "oil prices will rise to $90 per barrel and remain at that level throughout 2026 before gradually returning to historical norms."

The duration of oil price shocks remains critical. Price fluctuations directly impact global trade and prove most difficult to forecast. Staiger clarified that their projection assumes "oil reaching $90 per barrel and natural gas prices climbing to $16 per million British thermal units—levels seen on March 10, 2026—maintaining these levels throughout 2026 before gradually normalizing."

The team conducted analyses under various scenarios, including one where energy prices spike but quickly revert to historical levels. However, these variables didn't demonstrate unexpectedly high sensitivity in overall projections. Staiger emphasized that if energy price shocks prove brief, outcomes would align closely with their baseline scenario.

During the report's launch event, questions arose about the optimism of their forecasts. Staiger had previously indicated that if crude oil and liquefied natural gas prices remain elevated throughout 2026, global GDP growth would be reduced by 0.3 percentage points, further depressing global trade growth by 0.5 percentage points, with energy-import-dependent regions experiencing declines up to 1.0 percentage points.

Staiger clarified that although Brent crude had surged to $116 per barrel on the launch date (March 19), short-term intraday volatility shouldn't be overemphasized. His team conducted robustness tests regarding the annual average crude price, concluding that their current assumptions remain appropriate, though they will reassess and update forecasts in coming months.

The report explicitly notes that projections are "based on scenarios where conflict persists or becomes prolonged."

When asked about primary concerns for global trade, Staiger identified the duration of Middle East conflict impacts on energy and fertilizer prices as the greatest risk. This duration depends on multiple factors that defy precise prediction.

Regarding potential changes to the Gulf region's role as a global trade hub during or after the conflict, Staiger acknowledged this possibility. "If geopolitical factors lead economies to generally reduce dependence on external energy sources, particularly from Persian Gulf economies, such changes could occur," he stated. "This reduced dependence would affect not only energy trade but also the region's transportation and tourism service volumes and influence."

On the role of confidence in global trade analysis, Staiger emphasized that stable trade operations heavily depend on businesses maintaining sufficient confidence in the rules-based system's ability to ensure stable and predictable transactional relationships. Long-term, this confidence proves equally crucial for global trade as for financial markets.