Global Economic Outlook & Strategy: Renewed Uncertainties—But Continued Resilience

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Global Economic Outlook & Strategy: Renewed Uncertainties—But Continued Resilience

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23 Jul 2026 09:08:59 ET │ 47 pages

Global Economic Outlook & Strategy

Renewed Uncertainties—But Continued Resilience

CITI'S TAKE

Nathan Sheets AC

The global economy has absorbed a significant shock with the higher oil +1-212-816-2991

prices that have followed the Iran conflict and the closure of the Strait of nathan.sheets@citi.com

Hormuz. While the resulting pressures and uncertainties have taken a bite

out of performance, the pain to date has remained manageable and the Johanna Chua AC

global economy has shown continued resilience. Notably, our forecast for +852-2501-2357

global growth this year continues to run near 2½%, which is down only a johanna.chua@citi.com

couple of tenths from when the year began. This observation leaves us

correspondingly more sanguine about the prospects for the remainder of Arnaud Marès AC

the year, even if pressures in oil markets linger. The reality is that the global +44-20-7986-3299

economy is less dependent on oil than in previous decades. In addition, only arnaud.mares@citi.com

part of last year’s sizable accumulation of petroleum inventories has been

reversed, and global inventory levels generally remain ample. Ernesto Revilla AC

+1-212-816-2621

A range of scenarios for oil prices remain in play—If shipments through the Strait ernesto.revilla@citi.com

resume, oil prices could plausibly fall back to $70/barrel. However, if the tensions return AC Gina Schoeman

in a more sustained way, oil prices above $100/barrel are possible. With the November

+27-11-944-0813midterms fast approaching, President Trump looks to prefer a path of de-escalation, at

least to the extent that Iran is willing to negotiate and follow through on its agreements.