An internal World Bank document has revealed that 27 countries are now rushing to secure emergency funds in response to a severe energy shock triggered by the war in Iran.
At the heart of this issue is the largest energy supply disruption in modern history. The conflict in Iran led to the closure of the Strait of Hormuz, a critical chokepoint for global oil and gas shipments. This caused oil prices to jump by roughly 50%, from about $75 to $112 per barrel. For countries that import oil, this means much higher energy bills, which fuels inflation and puts immense strain on government budgets. Even some oil-producing nations, like Iraq, are facing shortfalls in revenue due to the disruption.
Faced with this sudden economic crisis, governments are looking for immediate financial relief. The leaked document shows that 27 nations are now actively working to pre-arrange access to the World Bank's crisis funds. They are not applying for new loans, which can take months to negotiate. Instead, they are setting up mechanisms to quickly draw down money from their existing loan programs. Countries like Kenya have already confirmed they are seeking this support to offset soaring fuel costs.
This rapid response is possible because of a crucial reform the World Bank made back in 2024. Here’s how the causal chain works. First, the energy shock created an urgent need for liquidity to cover higher import costs and support their economies. Second, traditional international aid is often too slow to address such a fast-moving crisis. Third, anticipating these kinds of shocks, the World Bank upgraded its crisis toolkit, creating the Rapid Response Option (RRO). This tool allows eligible countries to repurpose up to 10% of their undisbursed loan balances for immediate emergency use. It’s like having a pre-approved credit line ready for a crisis, enabling cash to flow in days or weeks, not months.
In essence, we are witnessing a fundamental shift in how global crisis financing works. The actions of these 27 countries, enabled by the World Bank's foresight, highlight a move away from slow, reactive loan negotiations toward a more agile system of pre-arranged, rapid financial support. This new playbook is becoming essential for navigating an increasingly volatile world.
- Rapid Response Option (RRO): A World Bank tool that allows countries to quickly divert a portion of their existing, undisbursed loan funds to address immediate crises like natural disasters or economic shocks.
- Strait of Hormuz: A narrow waterway between Iran and Oman, through which a significant portion of the world's oil supply passes. Its closure can cause major disruptions to the global energy market.
- Balance of Payments: A record of all economic transactions between a country and the rest of the world. A sudden spike in import costs, like for oil, can create a deficit, putting pressure on the country's currency and finances.