In 2025, it seemed that Donald Trump’s most ambitious tariffs since the 1930s would ruin the global economy. What could be worse? The conflict in the Middle East has answered this question. The frenzied rise in oil prices is raising the specter of a global recession on the horizon. However, this is not the worst thing. The White House has decided to reanimate old fears by imposing tariffs on European cars of 25%. But the risks of a new trade war did not scare the EURUSD either.
The rise in oil prices expected to reach record highs by the end of the year indicates that the United States is not yet winning the fight for survival. Treasury Secretary Scott Bessent claims that the blockade of the Strait of Hormuz has turned into a real economic blockade, and that the United States will eventually strangle Iran. In theory, it will be. By depriving Tehran of exports and overflowing its oil storage tanks, the Americans will launch a process of capital flight.
However, this takes time. And the longer the Strait of Hormuz remains closed, the higher Brent and WTI are. It is not surprising that Donald Trump is embarking on a new adventure. The Freedom project assumes that the coordination activities of the United States and its allies will allow the stranded tankers to be freed by searching for the safest transit route. If they are attacked, the White House promises to respond eye for an eye, tooth for tooth.
Iran has said that the Strait of Hormuz will not be governed by Donald Trump’s delusional social media posts. The opponents seem ready to violate the ceasefire, and the United States is forcing Iran to do so.
The risks of conflict escalation in the Middle East are increasing, but instead of falling, the EURUSD reaches a two-week high. Another paradox? In fact, the reason for the strengthening of the euro is the remarkable resilience of the global economy. Strong oil reserves, government consumer assistance policies, offsetting effects of the artificial intelligence boom, and significantly increased energy efficiency are holding back the Brent and WTI rallies.
Unsurprisingly, the IMF forecasts only slightly slower global economic growth of 3.1% in 2026, compared with 3.4% in 2025. Provided that the flows of energy goods resume by the middle of the year.
Of course, if the Strait of Hormuz remains closed for longer, the risks of recession will increase, and the more favorable position of the US economy compared to the European one will force the EURUSD to go down. However, for now, investors are counting on the best.
