The World Trade Organization (WTO) released its "Global Trade Outlook and Statistics" report in Geneva, reviewing the 2025 global trade situation and forecasting this year's trade trends. The report specifically emphasizes providing a "baseline growth scenario excluding energy price shocks."
Artificial intelligence and related technology products have driven global trade growth, contributing to over 40% of the increase in goods trade last year. However, recent Middle East conflicts have introduced significant uncertainties, with rising energy prices expected to impact both global goods and services trade volumes.
WTO Director-General Ngozi Okonjo-Iweala stated publicly during the release: "The Middle East conflict is exerting pressure on this baseline forecast, increasing cost pressures for consumers and businesses. Sustained rises in energy prices could amplify risks to global trade and generate spillover effects on food security, affecting both food transportation and fertilizer supplies. Additionally, the conflict will significantly impact some fragile economies."
Okonjo-Iweala urged that "WTO members can still cushion the shocks by maintaining predictable trade policies and enhancing supply chain resilience to alleviate the economic burden on people worldwide."
——Global Trade Growth Set to Slow
The report predicts an overall slowdown in the growth rate of global goods trade. While global trade achieved strong growth of 4.6% in 2025, this figure may decelerate to 1.9% in 2026. Coleman Nee, Chief Expert of the WTO Economic Forecasting Department, noted that while this is not the lowest point in the past four years, it is relatively low.
Director-General Okonjo-Iweala analyzed that the slowdown in growth for 2026 stems primarily from two factors: a deceleration in the surge of AI-related product trade and the gradual fading of effects from earlier anticipatory imports aimed at avoiding new tariffs. Subsequently, global goods trade volume is projected to grow by 2.6% in 2027.
Meanwhile, commercial services trade, after growing 5.3% in 2025, is expected to slow to 4.8% in 2026 before recovering to 5.1% in 2027.
Overall, combined goods and services trade is projected to grow by 2.7% in 2026, down from 4.7% in 2025. This trend aligns with global GDP growth, which is expected to moderate slightly from 2.9% in 2025 to 2.8% in both 2026 and 2027.
However, these projections were made prior to the recent Middle East conflict.
According to analysis by WTO Chief Economist Robert Staiger, if crude oil and liquefied natural gas (LNG) prices remain high throughout 2026, global GDP growth for 2026 could be revised down by 0.3 percentage points. This would further reduce global trade growth by 0.5 percentage points for the year, with regions highly dependent on energy imports potentially seeing reductions of up to 1.0 percentage points. Under this high energy price scenario, goods trade volume would grow by only 1.4%, while services trade growth would slow to 4.1%.
"We have also conducted different scenario analyses based on oil prices, as energy prices have increased significantly over the past two weeks, far exceeding our previous forecasts. However, the final impact depends on the annual average energy price," Staiger stated.
He added, "Under a high energy price scenario, goods import growth in net fuel-importing regions like Asia and Europe would be most impacted compared to the baseline scenario. Conversely, net fuel-exporting economies that maintain exports would generally experience stronger import trade growth due to increased revenues."
——Strait of Hormuz Blockade Disrupts Global Trade and Agriculture
According to WTO statistical analysis: Oil transported via the Persian Gulf accounted for approximately 20% of global liquid petroleum consumption in 2024. Due to the Middle East conflict, oil volumes have significantly decreased, causing sharp price increases that could heavily pressure goods trade in 2026. The region is also a crucial transport and travel hub, and disruptions to its operations could significantly affect services trade.
In this report, WTO economists attempted to assess the conflict's impact on goods and services trade based on limited information.
Chief Economist Robert Staiger analyzed that the Middle East conflict affects not only energy and fuel but also food and fertilizers. A blockade of the Strait of Hormuz also disrupts the supply of fertilizers crucial for global agriculture, as approximately one-third of global fertilizer exports typically pass through this waterway.
Major agricultural producers like India, Thailand, and Brazil depend on the Gulf region for urea imports, with dependency rates of 40%, 70%, and 35% respectively. Meanwhile, Gulf countries themselves face food security challenges, with an average dependency of about 75% on rice imports, and over 90% dependency on imports of corn, soybeans, and vegetable oils. Shipping these commodities via alternative routes would incur higher costs.
According to WTO analysis, the Middle East conflict threatens key global shipping lanes, with traffic through the Strait of Hormuz plummeting from 138 commercial vessels per day to nearly zero. The region accounts for 7.4% of global transport services exports and serves as a vital hub connecting Europe, Asia, and Africa. Related disruptions have led to over 40,000 flight cancellations and increased transport and insurance costs.
"If the conflict is short-lived, the impact may be primarily temporary with a rapid recovery expected. However, if the crisis prolongs, it could trigger structural increases in fuel and transport costs, reduced transit activities, and shifts in global travel and trade patterns towards alternative routes."
——AI Contributed Over 40% to Last Year's Global Trade Growth
Measured by exports, the current value of global goods trade reached $26.26 trillion in 2025, a 7% increase from 2024. Services trade reached $9.56 trillion in 2025, up 8% year-on-year. Calculated on a balance of payments basis, total goods and services trade amounted to $34.65 trillion in 2025, a 7% annual increase.
The overall negative impact of tariffs in 2025 was lower than expected, due to factors including the US delaying new tariff measures until August, limited retaliatory measures by other economies, and the existence of numerous tariff exemptions.
Furthermore, a surge in demand for AI-related goods offset the negative impacts of higher tariffs and uncertainty on global trade. In value terms, trade in AI-related goods grew 21.9% year-on-year, rising from $3.43 trillion in 2024 to $4.18 trillion in 2025. Although such products account for only one-sixth of total global trade, they contributed 42% to global trade growth in 2025. Notably, key AI-related goods such as chips, semiconductors, and data transmission equipment were largely exempt from the new tariffs.
WTO economists also pointed out that if the conflict is short-lived and AI-related expenditures remain strong in 2026 and 2027, there is potential upside. In that case, goods trade growth could be 0.5 percentage points higher, reaching 2.4% in 2026 and 2.7% in 2027.
——Can High Oil Prices and AI Influences Offset Each Other?
There is also a possibility that both upside and downside risks materialize simultaneously, meaning energy prices remain high while AI-related goods trade continues its strong growth. In such a scenario, goods trade growth in 2026 could be close to the baseline forecast level.
According to the baseline forecast, after growing 5.3% in 2025, global services trade volume is projected to grow 4.8% in 2026 and further increase to 5.1% in 2027. However, under a scenario adjusted for the Middle East conflict's impact and revised GDP assumptions, services trade growth in 2026 would be slightly lower (4.1%), recovering to 5.2% in 2027. This implies a reduction of 0.7 percentage points in the 2026 growth rate.
If high oil prices triggered by the recent Middle East conflict persist, they could reduce the originally projected 1.9% goods trade growth rate for 2026 by 0.5 percentage points. Conversely, if AI-related goods trade maintains its strong 2025 momentum, it could increase the growth rate by 0.5 percentage points.
Which factor will dominate for the full year remains to be seen.
Comments