Energy crisis from Hormuz disruption could sway elections worldwide in 2026

The scale of Iran’s asymmetric economic warfare could carry far-reaching macroeconomic consequences, shaping electoral outcomes not only in countries directly involved in the conflict but across the globe. The effective closure of the Strait of Hormuz—achieved with relatively limited means such as maritime mines and low-cost drones—has already triggered a global energy shock, elevating the conflict from a regional war to an international crisis.

The disruption has halted traffic through a vital artery that carries roughly one-fifth of the world’s liquefied natural gas supplies and one-quarter of global oil flows. Brent crude prices surged to $141 this week, their highest level since the 2008 financial crisis, as recorded by S&P Global. The fallout is also spilling into global food markets, as about one-third of the world’s urea and other fertilizers transit through the strait. With energy and logistics infrastructure damaged or destroyed, a return to normal production and export levels is likely to take time—even if hostilities were to end immediately.

It is increasingly clear that these disruptions will fuel a new wave of global inflation, as highlighted in an analysis by Geopolitical Monitor. The longer the conflict persists, the more entrenched inflationary pressures could become, raising the risk of significant political consequences worldwide and potentially influencing election outcomes.

The theory of economic voting suggests that deteriorating economic conditions tend to hurt incumbent governments, as voters often hold them responsible for poor performance—even when external factors are at play. A 2024 study by the Kiel Institute cited in the article, covering 365 elections, found that both unexpectedly high inflation and weak economic growth significantly boost support for extremist and populist parties.

Numerous countries are heading into elections this year  at various levels, from municipal to national contests. While rising inflation and volatile energy prices affect nearly all economies, some countries appear particularly vulnerable to political shifts driven by the current crisis—including Hungary, Slovenia, Armenia, and especially the United States and Israel as direct participants in the conflict.

In Slovenia, voters already elected a new parliament on March 22, in which outgoing Prime Minister Robert Golob's liberal Freedom Movement scored a tight victory winning 29 seats in the 90-seat parliament ahead of US President Donald Trump admirer Janez Janša's Slovenian Democratic Party. 

Slovenia's newly elected parliament will come together on 10 April opening the way for tough coalition talks as none of the parties combined with their allies could secure a majority. PM Golob launched coalition talks with two independent parties, the anti-establishment party Resni.ca (Truth) and a conservative party formed by former Janša ally Anže Logar. During these talks, he proposed the formation of a national unity coalition to face the potential global economic crisis caused by the US-Iran war.

Hungary’s parliamentary elections on April 12 may also offer an early indication. Although the full economic impact of the war may not yet be fully felt, the government has already introduced fuel price caps. Even before the conflict escalated, the article points out that early polling suggested a potential end to Prime Minister Viktor Orbán’s 15-year management of the country, with rising support for Péter Magyar, leader of the Respect and Freedom (Tisza) party, largely driven by domestic economic concerns such as high inflation.

Armenia has traditionally been an active trading partner with neighbouring Iran, but the ongoing US-Israeli strikes have introduced new uncertainty into its economic outlook. While a multitude of domestic challenges and regional relationships—particularly with Russia and Azerbaijan—are expected to be the primary factors shaping the upcoming elections, in which Prime Minister Nikol Pashinyan and his "Civil Contract" party will seek to retain their majority in parliament, volatility in global energy markets is also likely to play an important role.

The South Caucasus states' economy is closely tied to trade with Russia and benefits from preferential energy pricing through its membership in the Eurasian Economic Union at rates well below market levels. A sharp rise in oil and gas prices on the international market could prompt voters to reassess the government’s vision to reduce dependence on Moscow, as such a shift could mean losing access to those favourable terms.

Energy costs were a key topic during Pashinyan’s public discussions with the Russian president during his visit to Moscow in April, underscoring how central the issue has become to Armenia’s economic and political trajectory.

The war is also expected to weigh heavily on Israel’s upcoming October elections. The political future of Prime Minister Benjamin Netanyahu may hinge on the outcome of the conflict with Iran. Many analysts view the war not only as Netanyahu’s last chance of attacking Iran with the support of a US government and direct participation of the US military, but as both a strategic gamble and a political necessity for Netanyahu, amid ongoing corruption scandals, criticism over the government’s shortcomings that allowed for the October 7, 2023 attacks, and domestic controversy surrounding military conscription policies.

In the United States, the upcoming midterm elections—covering all 435 seats in the House of Representatives, a third of the Senate, and numerous local races—are also likely to be shaped by the conflict. So far, the war has done little to reverse President Donald Trump’s declining approval ratings, and a prolonged conflict could further weaken the Republican Party’s chances of maintaining its congressional majority.

Even if the administration manages to present a swift and convincing victory, the broader economic picture remains challenging. As noted by Geopolitical Monitor, rising inflation—driven by tariff policies and now compounded by the energy crisis—could still undermine electoral prospects. US inflation, while relatively stable at around 2.4% in February, remains above the Federal Reserve’s target, limiting the central bank’s ability to cut interest rates.

By Nazrin Sadigova