## Shock Absorbers

## Source details

**Canonical URL:** [Shock Absorbers](https://www.imf.org/en/publications/fandd/issues/2026/06/picture-this-shock-absorbers)

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- [Markdown version](/en/publications/fandd/issues/2026/06/picture-this-shock-absorbers/index.md)
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## Bibliographic details
- Authors: ANDREW STANLEY
- Published: June 2, 2026

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### Summary of the shock
- Oil prices have risen sharply with the latest war in the Middle East.
- The effective closure of the Strait of Hormuz, a route for about a quarter of seaborne oil trade, represents a major global supply shock.
- The damage from the shock will depend largely on how long the disruption lasts.
- Oil markets were well supplied heading into the disruption, strategic stock releases added barrels, and buoyant financial markets helped limit broader tightening in financial conditions.

### Structural cushions moderating the impact
- Energy efficiency
  - The world economy is far more energy efficient than it was 50 years ago.
  - Each dollar of output now requires roughly half as much energy as it did in 1980.
- Fuel diversification
  - The energy system is more diversified than in the past.
  - Oil’s share of the mix has fallen from about half in 1973 to less than a third today.
  - Oil remains the world’s leading fuel, but it no longer dominates.

### Distributional and country-level vulnerability
- Severity at the country level depends on:
  - How much oil an economy imports.
  - How much policy space its government has to respond.
- More than 80 percent of countries are net oil importers.
- Many of the most vulnerable countries entered this episode with limited room in public budgets to shield households and businesses.
- The same global shock can become a much harsher national one where import dependence is high and policy space is thin.

### Context and source
- This article draws on an April 9, 2026, speech by IMF Managing Director Kristalina Georgieva.
- ANDREW STANLEY is on the staff of Finance & Development.
- June 2026; F&D Magazine.

*From: "Shock Absorbers" by Andrew Stanley, F&D Magazine, June 2026.*

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## Content in this bundle

- **Picture This**
  - [Picture This (Markdown version)](/-/media/files/publications/fandd/article/2026/06/picture-this.pdf.md){rel="alternate" type="text/markdown"}
  - [Picture This (PDF)](/-/media/files/publications/fandd/article/2026/06/picture-this.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/fandd/issues/2026/06/picture-this-shock-absorbers_