Subscribe on YouTube

The Energy Escalation Freezes Global Monetary Policy | What It Means for Business podcast
Published: 23 March 2026 | Coverage: 15 March 11:59 AM to 22 March 12:00 PM London time
[AMINE LAOUEDJ, MANAGING DIRECTOR]
Welcome. Each week from London, we break down the key global economic event that shaped the past seven days, and we analyze what it means for business.
[LAST WEEK’S KEY ECONOMIC EVENT]
Last week, the war in the Gulf escalated dramatically. Both sides started targeting energy infrastructure, and the damage spread far beyond Iran and Israel.
On Wednesday, Israel struck South Pars, the world's largest natural gas field. Iran depends on it for 70% of its domestic gas supply. The strikes knocked out a significant share of production and shut down Iran's gas exports entirely. Because Iraq depends on Iranian pipelines, it lost a third of its electricity in a single day.
Iran retaliated within hours. It struck Ras Laffan in Qatar, the largest LNG export facility on earth, and also hit Saudi refineries and energy infrastructure in the UAE. By Thursday, neutral countries were taking direct damage.
As a consequence, markets moved significantly. Brent crude briefly touched $119 before closing the week around $106, a 45% increase in three weeks. European gas prices have doubled over the same period. And the disruption compounds what was already building. With the Strait of Hormuz closed, a third of globally traded fertilizer and nearly half of all traded sulfur were already trapped. Now production facilities on both sides of the Gulf are being destroyed. Petrochemical inputs, plastics, packaging, are all under pressure, right as the Northern Hemisphere enters planting season. This is not just an energy shock. It is a broad supply chain shock that reaches into food, manufacturing, and consumer goods.
[REACTIONS FROM POLICY MAKERS]
In this context, central banks reacted. On Wednesday, the US Federal Reserve froze interest rates. The next day, the ECB, the Bank of England, and the Bank of Japan all did the same. Four major central banks all halted the rate cuts that businesses had been counting on for months.
Here is why that matters. Before the war, inflation was falling toward the 2% target. Central banks were actively cutting. The Fed had cut by 1.75% through 2024 and 2025. The ECB and the Bank of England had been easing. 2026 business plans were built on the promise of cheaper money.
Last week's strikes shattered that trajectory. When energy prices surge and supply chains seize up, it costs more to produce and transport almost everything, from factory power to freight to fertilizer to food. That is how a supply shock turns into broad inflation.
The standard response to inflation is raising interest rates, which makes borrowing expensive and slows consumer spending. When inflation comes from people spending too much, this works. But when it comes from a supply shock, higher rates do not rebuild gas fields or get fertilizer onto ships. They just crush businesses that are already under pressure.
So why not cut rates to support the economy instead? Because central banks tried exactly that in 2021. Supply disruptions pushed prices higher, central banks assumed it was temporary, and they were wrong. Inflation became entrenched. Every major central banker has promised not to repeat that mistake.
That is the trap. They cannot cut without risking permanent inflation. They cannot hike without crushing growth. The Fed raised its inflation forecast to 2.7%. The ECB raised its to 2.6% and slashed growth to 0.9%. The Bank of England said the balance has shifted toward a longer hold, or even a hike. Markets that were pricing in rate cuts just weeks ago are now betting on hikes. The era of cheaper money is over.
[WHAT IT MEANS FOR BUSINESS]
So, what does this mean for business?
The overall impact is highly negative.
Companies are now caught between forces that reinforce each other. Energy costs are surging, input costs across the supply chain are climbing, and borrowing costs are staying high or going higher.
The most exposed businesses sit in energy-importing economies. Europe is the clearest case. The eurozone imports nearly all of its oil and gas, and its manufacturers depend heavily on petrochemical inputs that are now disrupted. Profit margins are shrinking, demand is weakening, and financing is getting more expensive. Any business carrying floating-rate debt is watching its repayments climb in real time.
On the other side, producers outside the Gulf are capturing a windfall.
The United States is the world's largest oil producer, produces most of its own fertilizer, and does not depend on the Strait of Hormuz. US domestic oil is trading at an eight-dollar discount to global benchmarks, giving American industry a major cost advantage.
[WHAT TO DO]
Business leaders need to act on three fronts.
First, do not plan around this being temporary. The strikes last week destroyed physical production capacity. Ras Laffan repairs alone could take up to five years. This is not a price spike that fades when tensions ease. If your 2026 plans assume energy and input costs coming back down, rewrite them now.
Second, map your supply chain for Gulf exposure. Many businesses do not realize how much of what they buy depends on materials that transit the Strait of Hormuz or are produced in the Gulf. This goes beyond fuel. It includes fertilizers, petrochemical derivatives, plastics, and packaging.
Third, revisit every assumption you made about borrowing costs. Across the world, rate cuts that seemed certain four weeks ago are now off the table. In some economies, markets are pricing in hikes.
If you have investment decisions, acquisitions, or expansion plans that were built on the assumption of cheaper financing, the math has changed. Rerun it.
[AMINE LAOUEDJ, MANAGING DIRECTOR]
Thank you for listening to this episode of What It Means For Business. Have a good week.

In each episode of What It Means for Business podcast, we break down the key global economic event that shaped the past seven days and analyze it for business leaders.

Today’s topic: The Energy Escalation Freezes Global Monetary Policy.

With Glenshore's Managing Director Amine Laouedj.

Date of recording: 23 March 2026

The views expressed in this episode are those of Glenshore and are provided for informational and educational purposes only. They do not constitute investment advice, financial advice, or a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties, express or implied, as to the accuracy or completeness of the information provided and disclaims any liability for reliance on such information for any purpose. Each name of a third-party organisation mentioned is the property of the company to which it relates and is used strictly for informational and identification purposes only. This material should not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.