Could Emerging Markets Be the Biggest Winners from the US-Iran Peace Deal?

Emerging market economies, which experienced some of the most significant collateral damage from the US-Iran conflict due to rising energy import expenses and disruptions to supply chains, are poised to gain disproportionately from the peace agreement announced on Sunday. Nations throughout South and Southeast Asia, Sub-Saharan Africa, and Latin America that depend heavily on Middle Eastern sources for oil and gas witnessed a dramatic rise in import bills during the closure of the Strait of Hormuz, putting pressure on foreign exchange reserves and government budgets, which caused inflation to soar well above central bank targets in several countries. For India, which is significantly dependent on Iranian crude oil despite sanctions and previously sourced about 15 percent of its oil imports from Gulf Arab suppliers leveraging Hormuz, the reopening deal provides notable fiscal relief. During the disruption, Indian refiners had to turn to more expensive alternatives from West Africa and the Americas, which greatly increased their import expenses. The Reserve Bank of India had indicated that high energy costs posed a risk for inflation that limited its ability to lower interest rates, and a stabilization of oil prices might create opportunities for monetary easing that would bolster India's domestic investment cycle. The implications for technology investments in emerging markets are also substantial. Some of the world’s fastest-growing markets for AI adoption, including India, Brazil, Nigeria, and Indonesia, have been dealing with the economic impact of high energy costs in ways that have limited consumer and government budgets available for technology investments. Reduced energy expenses would enhance fiscal and household spending capacity, allowing technology firms, from smartphone manufacturers to cloud services to fintech startups, to increase their market penetration efforts in the latter half of 2026.