Iran has reopened the Strait of Hormuz, leading to a significant drop in crude oil prices. The S&P 500 reached an all-time high this week, and the CBOE VIX is back to pre-Middle East war levels. As of April 17, the MSCI All Country World Index was up 4.88 percent year to date. The IMF chief noted that even the most hopeful scenario involves a growth downgrade due to infrastructure damage and supply disruptions.
Despite the positive market response, concerns remain. The IMF’s April 2026 World Economic Outlook suggests that the global economy is vulnerable to negative headlines. A Bloomberg report indicates that Gulf and European leaders believe a peace deal between the US and Iran may take six months. In India, the March WPI print shows the war’s impact on inflation, particularly in energy prices.
While India shows resilience, with S&P Global Ratings projecting 6.3 percent growth even if crude averages $130 in FY27, external shocks from oil and geopolitics remain a concern. The reopening of Hormuz could change the dynamics significantly.
