The World Trade Organization has warned that global trade growth is set to slow significantly in 2026, with escalating risks tied to energy markets and shipping disruptions stemming from the Middle East conflict.

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In its latest Global Trade Outlook and Statistics report released March 19, the WTO projects merchandise trade growth will fall to 1.9% in 2026, down sharply from 4.6% in 2025. The slowdown reflects the fading impact of last year’s surge in AI-related goods and tariff-driven frontloading.

Overall trade in goods and services is expected to expand by 2.7% in 2026, compared to 4.7% the previous year, while global GDP growth is forecast to ease slightly to 2.8%. However, these projections hinge on relatively stable energy prices—an assumption now under increasing strain.

Energy Price Risks Cloud Outlook

WTO economists caution that persistently high crude oil and LNG prices could drag merchandise trade growth down further to 1.4%, while shaving 0.3 percentage points off global GDP.

The effects would be most pronounced in energy-importing economies, where trade growth could drop by as much as one percentage point. Services trade, particularly in transport and travel, would also feel the pressure, slowing to 4.1% instead of the baseline 4.8%.

WTO Director-General Ngozi Okonjo-Iweala emphasized the fragility of the current outlook, warning that sustained energy price increases could intensify cost pressures for businesses and consumers while posing risks to global food security.

Hormuz Disruptions Amplify Supply Chain Strain

Beyond energy markets, the WTO highlighted escalating supply chain disruptions linked to the Strait of Hormuz, a vital artery for global trade.

Vessel traffic through the corridor has effectively ground to a halt, plunging from around 138 ships per day to near zero as tensions escalate. The shutdown is impacting a critical route connecting Asia, Europe, and Africa, with ripple effects already spreading across global markets.

Agricultural supply chains are particularly exposed. Roughly one-third of global fertilizer exports typically pass through the strait, leaving major importers such as India, Thailand, and Brazil vulnerable to supply disruptions. Meanwhile, Gulf nations—highly dependent on food imports—face mounting food security concerns.

AI-Driven Growth Masks Structural Weakness

The WTO noted that 2025’s stronger trade performance was largely fueled by a boom in AI-related goods, including semiconductors and data infrastructure.

Trade in these products surged 21.9% year-on-year to $4.18 trillion, accounting for 42% of total trade growth despite representing a relatively small share of overall volumes. While continued AI investment could provide some support, it may not be enough to offset broader geopolitical risks.

Should tensions ease and technology demand remain strong, merchandise trade growth could recover modestly to 2.4% in 2026.

Shipping Faces Renewed Uncertainty

WTO economists stress that both upside and downside scenarios could unfold simultaneously, leaving overall trade growth close to baseline projections.

For the shipping sector, however, the trajectory is becoming increasingly clear: rising energy costs, elevated war-risk premiums, and disrupted trade routes are once again reshaping global trade dynamics.