00:00Even before the outbreak of the Middle East conflict, we were predicting that merchandise
00:06trade at a global level would, growth would fall from its 4.6% rate in 2025 down to a
00:151.9% rate in
00:162026. And we are expecting that because of the Middle East conflict, if it leads to elevated
00:24energy prices throughout the year, that could shave another half a percent of growth off of
00:29merchandise trade. So the growth rate would be 1.4% that we're predicting in 2026.
00:38Are you assuming that there's going to be – how do you factor in a scenario where this
00:42becomes more prolonged, where it's much more difficult to get these energy assets back into
00:46play? We're looking at the Qataris, for example, with an outage maybe of three to five years for
00:50part of their gas infrastructure. Do we need to start to think about what a longer term
00:56disruption means even if hostilities end?
01:01Our baseline forecast scenario that predicted a 1.9% growth in merchandise trade in 2026
01:08reflected a tug of war of several factors that were important in boosting trade in 2025 and
01:18led to diminished trade growth in 2026 due to the fact that these factors are no longer likely
01:25to be quite such a boost to trade. Beyond that, the question about the duration of the elevated
01:33prices from the war, we have assumed in our conflict scenario that prices of oil and prices
01:43of natural gas stay at their March 10 level. That's $90 per barrel for oil and $16 per million BTU
01:52for
01:52natural gas and stay elevated through 2026 and then return to their historic levels. So that's the
01:59pricing scenario that we have built into our conflict scenario that we are suggesting would shave off a
02:05half a percentage of growth in trade over 2026. Now, that could be understating or overstating,
02:13of course, the price effects of the conflict. Part of it depends on the duration of the conflict.
02:19Part of it also depends on whether oil and natural gas infrastructure are damaged. Even if the conflict
02:27ends relatively quickly, those those infrastructure damages could have a lasting effect.
02:33Yeah, the duration of this disruption, a key unknown right now. Good morning to you, Robert.
02:38We focus a lot when we talk about trade. We have done in recent years on goods trade, but clearly
02:43services are traded as well.
02:45What assumptions are you making there with regards to Iran? Because I'm thinking about the role that the region plays,
02:50increasing role that the region plays in global tourism, for example.
02:55That's exactly right. And services trade tends to be less variable over the years. It grew very quickly in 2025,
03:04and we're projecting that it will also grow slightly less quickly in 2026 in our scenario that does not
03:13incorporate the effects of the conflict. The effects of the conflict would shave, according to our
03:18predictions, about 0.7, 7 tenths of a percent of growth off of service trade, in part because, as you
03:27point out,
03:28the Middle East is a transportation hub and a tourism hub, and those services are very important in the global
03:37economy and
03:37could be directly impacted, of course, through the geography of the conflict.
03:42So, let's look at that.
03:42Let's look at that.
03:43Let's look at that.
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