Quick overview

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According to the World Trade Organization (WTO), rising oil prices and uncertainty surrounding the outlook for artificial intelligence investment are weighing on global trade prospects.

The organization also warned that the war in the Middle East could further worsen the outlook.

Global merchandise trade growth is expected to slow to 1.9% in 2026, down from 4.6% in 2025, and could decelerate further if the conflict in the Middle East continues to drive up energy prices and disrupt global transport, the WTO said in a report.

If crude oil and liquefied natural gas prices remain elevated throughout 2026 due to the conflict, trade growth could slow even further to 1.4%, WTO economists added. A prolonged blockade of the Strait of Hormuz by Iran would impact major importers such as India, Thailand, and Brazil, increasing risks to global food security.

Higher energy prices could shave 0.5 percentage points off trade growth, with Asian and European importers among the most affected. Services trade is also expected to weaken, with growth projected to decline by 0.7 percentage points — from 4.8% to 4.1% — due to disruptions in maritime and air transport. Services trade expanded 5.3% last year.

WTO Director-General Ngozi Okonjo-Iweala noted that while global trade remains resilient — supported in part by AI-related goods — the outlook is increasingly threatened by escalating tensions between the United States, Israel, and Iran.

AI outlook adds uncertainty

Last year, global merchandise trade grew at nearly twice the expected pace, as strong demand for AI-related products — including chips and semiconductors — offset the impact of U.S. tariffs.

AI-related goods accounted for 42% of global trade growth, despite representing only about one-sixth of total trade. The segment expanded 21.9% year over year to reach $4.18 trillion in 2025. However, the report flagged the sustainability of investment in the sector as “a major uncertainty for 2026 and beyond.”

For this year, global trade in goods and services and global GDP are expected to grow at roughly similar rates — 2.7% and 2.8%, respectively — following growth of 4.7% and 2.9% last year.

Asia is projected to lead merchandise import growth in 2026, with imports rising 3.3% and exports 3.5%, followed by Africa with 3.2% import growth and 1.2% export growth. North America, by contrast, is expected to remain relatively flat, with imports increasing just 0.3%.

Around 72% of global trade is currently conducted under most-favored-nation (MFN) terms, down from roughly 80% at the start of last year, after former President Donald Trump imposed higher import tariffs, WTO economists said. Under MFN rules, WTO members are required to treat all trading partners equally.

Against this backdrop, a new WTO conference will be held in Cameroon next week, where trade ministers are set to discuss potential reforms to the global trade body.