In their Global Economics Monthly Flyover (24 March), the Deutsche Bank Research team note that “at current prices, the energy spike represents a material but manageable shock to the global economy, taking off slightly under 0.5 percentage points from global growth while adding one percentage point to inflation.”
But they warn, “oil prices nearing US$150/bbl would likely push the Euro Area and Japan into brief recessions and lead to stagflation across much of Asia”. To put it more starkly, they explain, “if the Strait of Hormuz traffic does not effectively re-open over the course of 2026, a global recession is likely to ensue as the required demand destruction intensifies.”
The variation of the impact across regions is also something the report highlights – in line with the IEA, IMF and World Bank Group statement. The Deutsche Bank Research team note that the US, as a net energy exporter, “is less exposed to a growth shock but faces a larger inflation impulse than most countries”. Deutsche Bank Research’s US Chief Economist Matthew Luzzetti projects Q4/Q4 2026 growth of 2.4% with the caveat that “rising oil prices pose a downside risk”.
For the Euro Area – reliant on energy imports, with baseline projects based on US$100/bbl Brent pricing – the team have reduced their 2026 GDP view from +1.1% to +0.5% “as the energy shock pushes the economy towards stagnation over the summer”.
A subsequent Deutsche Bank Research report published on 14 April makes the point that Europe’s structural vulnerability because of the crisis is twofold. “The direct part (trade exposure to Gulf countries on crude oil, gas, oil derivatives, chemicals and metals) is tangible.” However, energy that arrives embedded within industrial inputs with a precise fit in supply chains is much harder to substitute than fungible commodities such as oil or natural gas, for which Europe’s sourcing has already shifted to other suppliers.6
While in Europe the energy shock, they note, “is first and foremost a price shock”, Asia is more directly exposed “given it is the primary buyer of oil and LNG exports from the Middle East”.
Yi Xiong, Deutsche Bank Research China Chief Economist points out that “China’s overall less reliance on oil and gas (26% of total energy supply compared with 52% in the world) and high oil reserves (see Figure 1) “could help maintain the economy’s resilience and potentially boost global demand for its renewable energy sector”.
Figure 1: China total oil reserves including commercial, SPR and refinery facilities
Source: Kpler, Deutsche Bank (from Hsueh on oil, Deutsche Bank Research, 31 March 2026)