IMF warns recession Hormuz shut; Spain taps reserves
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- IMF warned that a prolonged Hormuz shutdown could trigger a global recession, presenting three growth scenarios—“weaker,” “worse,” and “severe”—and noting elevated downside risks while selecting the most benign scenario as its base case.
- Spain released 4 of its 90 days of strategic oil reserves, with an additional 8 days to follow, leaving 78 days of reserves; the IEA estimates that even if Hormuz reopened tomorrow, normal oil flows would take 60 to 150 days to restore.
- Brussels is proposing a “state subsidy bonanza” to address the energy shock, extending assistance beyond existing state‑aid rules.
- Canada’s Prime Minister Carney suspended federal gasoline and diesel taxes to cushion fuel costs.
- US Treasury announced it will not renew the temporary easing of Iran oil sanctions and sent enforcement notices to China and Hong Kong.
- Vance reiterated that President Trump seeks a “grand bargain” with Iran, rejecting a 20‑year uranium enrichment moratorium and demanding a permanent end to Iran’s nuclear ambitions.
- Israel hosted a historic summit with Lebanese envoys in the United States to discuss a peace deal, with Lebanon seeking liberation from Iran‑backed Hezbollah.
Why it matters: The IMF’s recession warning and the IEA’s 60‑150‑day timeline for normal oil flows underscore how the Hormuz shutdown squeezes global growth, prompting Spain’s reserve releases, EU subsidies, Canadian fuel‑tax cuts and diplomatic overtures. Consumers and energy‑dependent economies bear the brunt, while oil‑rich nations gain bargaining leverage.
