An extended period of high oil prices as a result of war in the Middle East could “crimp” the AI boom, the World Trade Organization’s chief economist has warned.
The war and its impact on energy and fertiliser costs is the main risk to the global economy identified in the WTO’s latest Global Trade Outlook.
But the Geneva-based body also raised a question mark about the continued strength of AI investment, which in 2025 helped to offset the hit to global trade from Donald Trump’s tariffs.
“There is an interesting possible interaction between the Middle East conflict and the AI boom, in part because the boom is very energy-intensive,” said the WTO’s chief economist, Robert Staiger. “If the price of energy continues to be elevated for the whole year, that could put a crimp on the AI boom.”
He added: “Because that investment is very concentrated in a number of very large firms, and the technology is still ultimately unproven in terms of how much it can deliver, there is a bit of uncertainty there in terms of where the future’s going.”
Underlining the importance of the sector, the WTO calculated that in the first three quarters of last year, about 70% of all investment growth in North America was accounted for by AI-related goods. By comparison, in the three years before the catastrophic US housing crash of 2008, property made up 30% of investment growth.
Despite Trump’s protectionist policies, which raised US tariffs on many goods to their highest level in decades, world trade in goods expanded by a robust 4.6% in 2025, the WTO said – helped by a strong export performance from Asian economies.
Even without a prolonged energy shock, it expects the growth rate of global goods trade to slow sharply this year, to 1.9%.
But the WTO suggested that a year-long period of high energy prices would knock an additional 0.5% off goods trade growth, and jeopardise food security.
“Risks to the forecast are tilted to the downside, and are mostly linked to the conflict in the Middle East through higher energy prices, which could weigh heavily on output and trade unless they are short-lived,” it said.
“Given that the Gulf region is a major exporter of both energy and fertilisers, a prolonged interruption in supply could ripple across food systems, exacerbating the effect of pre-existing export restrictions,” it added.
The WTO has struggled to maintain its relevance in Trump’s second term, as the US president has unleashed a wave of tariffs regardless of the organisation’s rules, and rival economies have broken their own commitments in signing up to deals with Washington.
