Oil at $135 would reduce global production by 0.5%, according to the OECD

Adverse Scenario: 0.5% Contraction in Global Production

In an adverse scenario, an unexpected rise in energy prices would lead to a reduction in global output of about 0.5% over the next two years. This scenario assumes average oil prices of $135 per barrel in the second quarter of 2026 and TTF natural gas prices of €77/MWh, which are higher by 26% and 17%, respectively, compared to the baseline trajectory. Consumer prices would increase by an average of 0.9% globally, with more significant effects in emerging market and developing economies.
Monetary authorities would proceed with policy rate hikes of 25 to 50 basis points in many economies to keep inflation expectations anchored. Economies in the Asia-Pacific region would be particularly affected due to the significance of their energy imports, notably Japan and Korea, where net energy imports account for more than 80% of domestic consumption.
This scenario does not include forced reductions in energy consumption by businesses in the event of severe shortages, which would produce further negative effects on short-term growth. Potential disruptions in supplies could intensify due to the relatively low levels of European gas reserves and the lack of substitution capacity to export the unused global crude oil production capacity, mainly located in Saudi Arabia.

Positive Outlook: 0.3% Increase in Global Production

In the favorable scenario examined by the organization, a quicker than expected de-escalation of hostilities would lead to energy prices returning to pre-conflict levels within a few months. Global production would increase by about 0.3% in the second year, with real incomes improving in energy-importing economies. Key interest rates would be cut by around 25 basis points in many economies due to eased inflationary pressures. Consumer prices would decrease, with the global level approximately 0.7% lower by the end of the second year following the shock.
Lastly, the OECD notes that current disruptions are expected to gradually ease and be limited by 2027, according to anticipated declines in energy prices observed in the futures markets.