The OECD warns that a prolonged conflict involving Iran could disrupt global energy supplies and weaken economic growth, with the UK facing particular vulnerability in diesel availability. In its latest Economic Outlook, the Paris-based organisation sets out a “prolonged disruption” scenario in which there is no agreement between the US and Iran until 2027. Under that scenario, the OECD forecasts weaker global growth and rising recession risks, describing potential economic contractions across multiple countries. The OECD also highlights the risk that extended conflict could tighten supplies of key energy products, including diesel, leading to shortages. It specifically says rural parts of the UK are “particularly at risk” of diesel shortages if the conflict continues to squeeze supply lines.
On the UK outlook outside the most severe disruption scenario, the OECD forecasts UK economic growth of 0.9% for 2025, a modest upgrade from 0.7% in its March forecast. The OECD adds that government spending is expected to provide short-term support for the economy, even as it flags broader downside risks linked to the international situation.
