IEA, IMF and World Bank Form Coordination Group to Tackle War-Driven Energy Crisis

The heads of the International Energy Agency, International Monetary Fund and World Bank Group have agreed to establish a joint coordination group to strengthen the global response to the energy and economic crisis caused by the war in the Middle East.

In a joint statement, the three institutions said that the conflict has created one of the largest supply shortages in the history of global energy markets, with severe consequences for countries around the world, particularly energy-importing and low-income nations.

The institutions warned that the war has sharply increased oil, gas and fertiliser prices, while also raising concerns over food inflation. Disruptions to global supply chains for commodities such as helium, phosphate and aluminum have further intensified the crisis. Tourism has also been hit due to flight disruptions at major Gulf transport hubs.

According to the statement, the resulting market volatility is weakening currencies in emerging economies and increasing concerns over inflation, raising the risk of tighter monetary policy and slower global economic growth.

The coordination group, agreed by Fatih Birol, Kristalina Georgieva and Ajay Banga, will focus on supporting countries most exposed to the downstream effects of the conflict and those facing high debt levels and limited policy flexibility.

Under the agreement, the group will first assess the severity of the crisis across countries and regions through coordinated data sharing. This will include tracking energy prices and markets, trade flows, fiscal pressures, inflation trends, balance of payments challenges, export restrictions on critical commodities and broader supply-chain disruptions.

The group will also coordinate a response mechanism that could include targeted policy advice, assessments of financing requirements and the provision of financial support, including concessional financing and risk-mitigation tools for vulnerable economies.

In addition, the three institutions said that they will work with other multilateral, regional and bilateral partners to deliver a more coordinated international response. The group will also draw on expertise from other international organisations where necessary.

The three organisations said that they are committed to working together to preserve global financial stability, strengthen energy security and support affected countries through recovery, growth and job creation.